HSBC Settles Botched Foreclosure For $249 million- JPM, BAC, C, GS, & MS

Northern, WI 1/20/2013 (wallstreetpr) –Two years after the Fed’s instructions to arrange individual case-studies for botched mortgages foreclosures at American mortgage firms HSBC Holdings Inc. (NYSE:HBC) has agreed to pay $249 million to settle customers’ foreclosure claims. US borrowers will be reimbursed by $96 million in cash and the rest in other mortgage benefits for foreclosures the bank made in 2009 and 2010.

In the first week of January another twelve large-scale US mortgage service providers agreed to settlements to the tune of $8.5 billion due to erroneous foreclosures. The notable of these include JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp. (NYSE:JPM) and Citigroup Inc. (NYSE:C). Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) agreed to settle with the Feds for $557 million.

During one of the nation’s worst economic crises, mortgage providers resorted to inappropriate foreclosures which included the notorious Robo – signing of papers.

An HSBC Holdings Inc. (NYSE:HBC) spokesman said the bank was happy to have reached a settlement with the other 12 heavyweights and that it was an optimistic development for the affected homeowners. The bank will pay out $96 million in Q4 of 2012 and another $153 million in other aids. Very recently, the mortgage bank promised to shell out $1.9 billion to wind up a money-laundering investigation by the US Department of Justice.

Depending upon the degree of damage caused to the homeowner, cash compensations will be paid out with reimbursements reaching almost $125,000. Almost 4.2 million borrowers are expected to benefit from this compensation.

From the $9.3 billion payout, Bank of America Corp. (NYSE:BAC)  tops with a $2.9 billion share followed by Wells Fargo and JPMorgan Chase & Co. (NYSE:JPM) with $2 billion each.

Banks which didn’t participate in the January settlement will be brought under the purview by the April 2011 action.

Fees amounting to $1.5 billion are thought to have been paid to consultants during the review process. It’s quite odd that the banks paid this amount in fees when the reimbursement to affected borrowers was just a little more than double that amount.

The new settlement brings an end to case-by-case investigations.

JPMorgan Chase & Co. (NYSE:JPM) shares were up 0.04% to $46.46. The Bank of America Corp. (NYSE:BAC) shares were down 1.24% to $11.14. Citigroup Inc. (NYSE:C) shares were up 1.02% to $41.66. Goldman Sachs Group Inc. (NYSE:GS) shares were up 2.44% to to $144.45 and Morgan Stanley (NYSE:MS) shares were up 7.86% to $22.38.

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing. http://www.facebook.com/ben.rouss