The Federal Reserve Board announced on Friday (Feb. 5) that it has levied a $131 million penalty against HSBC North America Holdings and HSBC Finance Corp. tied to deficiencies in residential mortgage loan services and foreclosure processing. The board said in a statement that the penalties come in conjunction with “an agreement involving similar deficiencies” that HSBC announced that same day with a number of federal agencies and legal entities, including the U.S. Department of Justice and a number of state attorneys general.
As noted by the release, the penalty directed by the Fed remains the maximum sanctioned by the law, with the ability to be cured in the event the bank provides borrower assistance, remediation or funding for nonprofit housing counseling organizations. But if HSBC does not satisfy that full $131 million penalty amount in two years, any amount outstanding must be paid to the Treasury Department of the United States.
The Federal Reserve Board made mention in its release that the terms of the monetary fine are similar to fines that were part of penalties issued by the entity in Feb. 2012 and July 2014 against a number of other mortgage servicing organizations; those firms also reached agreements with the U.S. Department of Justice and attorneys general of different states. Specifically, as pertains to HSBC, the Federal Reserve Board said that, in April 2011, it issued an enforcement action against the company in order to correct servicing and foreclosure-related deficiencies. That particular action was among 14 issued that year against mortgage servicers or their parent companies overseen by the board, with alleged actions of “unsafe and unsound practices” related to residential mortgage loan servicing or foreclosures, the board noted.