Attorney General Mark R. Herring announced today that more than 2,100 Virginia borrowers who were harmed by the mortgage servicing and foreclosure practices of HSBC will begin receiving checks of approximately $1,200. Eligible borrowers included those who had mortgages serviced by HSBC Mortgage, and who lost their homes to foreclosure between January 1, 2008 and December 31, 2012. Checks will be distributed beginning February 17 and all checks should be received by consumers in the coming weeks.
“Our nation and our Commonwealth are still recovering from the effects of the housing crisis, but settlements like this have helped provide some measure of relief as well as critical changes in the way mortgage servicing companies do business,” said Attorney General Herring.”Borrowers who qualified for the settlement should keep a close eye out for any potential scams related to this settlement, as high profile settlements can attract dishonest criminals trying to take advantage of the situation.”
HSBC agreed to a national settlement with the Commonwealth of Virginia, 48 other states and the District of Columbia, and the federal government following state and federal investigations which alleged numerous violations in its servicing of mortgages and its foreclosure procedures. The $470 million settlement, which was filed in February 2016 and took effect in March 2016, made $59.3 million available for over 74,000 borrowers nationwide who lost their homes to foreclosure during that period and had their loans serviced by HSBC.
Attorney General Herring sent claim forms to eligible Virginia borrowers in August 2016 with a filing deadline of November 15, 2016. As a result of outreach and research by Attorney General Herring’s Consumer Protection Section, Virginia exceeded the national average by having nearly 68% of eligible borrowers file a claim to receive part of the HSBC national foreclosure settlement. Every consumer who filed a claim should receive a written response from the settlement administrator. Those whose claims were approved will receive a check. Those whose claims were denied will receive a letter informing them that they were found ineligible. Anyone who receives a check or a letter and who still has questions is encouraged to call the Settlement Administrator at the following number:(888) 538-5792.
Beware of scams
Attorney General Herring also warns all homeowners to be aware of settlement-related scams. Borrowers should closely examine any interactions or correspondence they receive to ensure it is legitimate and not a scammer trying to take advantage of this high-profile settlement. Do not provide personal information or pay money to anyone who calls or emails you claiming that they are providing settlement-related assistance. If you believe someone is conducting a settlement-related scam, call Attorney General Herring’s Consumer Protection Hotline at (800) 552-9963.
Settlement background
The HSBC national settlement followed state and federal investigations, which alleged that HSBC routinely signed foreclosure-related documents outside the presence of a notary public and without personal knowledge that the facts contained in the documents were correct. This civil law enforcement action also alleged that HSBC committed widespread errors and abuses in its foreclosure processes.
Broad reform of the mortgage servicing process resulted from the settlement, as well as financial relief for borrowers still in their homes through direct loan modification relief, including principal reduction.
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