Schneiderman to sue HSBC for illegal foreclosure practices

June 04, 2013 10:00AM

New York Attorney General Eric Schneiderman said today that he is suing bank HSBC Holdings Plc for breaking foreclosure law and putting New Yorkers at greater risk of losing their homes, according to Crain’s.

A state investigation found that HSBC left homeowners facing foreclosure by failing to meet requirements for giving them an opportunity to negotiate loan modifications, according to Schneiderman’s office.

“Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” Schneiderman said in a statement.

The HSBC case stems from a state law requiring lenders and servicers who sue to foreclose to file paperwork that kicks off a requirement for a settlement conference within 60 days. The investigation found that HSBC failed to file the paperwork on hundreds of such cases and in some instances, delayed the document filing for more than two years.

A spokeswoman for the London-based HSBC declined to comment on the matter.

The lawsuit comes as state attorneys nationwide crack down on illegal foreclosure practices, resulting in high profile settlements such as the $25 billion settlement last year with Bank of America and other servicers. [Crain’s]  – Hiten Samtani