A major bank has suspended its foreclosures on property owners following a federal investigation for technically deficient reasons.
HSBC Holdings PLC, a Lond0n-based bank, put a moratorium on its foreclosures as the result of a U.S. government probe by two agencies: The Federal Reserve Board and the Office of the Comptroller of the Currency.
This another example of a major bank using “robo-signers” who signed affidavits verifying the accuracy of all loan documents in the foreclosure file, without in fact having done the verification.
Many homeowners have lost their homes in technically deficient foreclosure proceedings, which could have been prevented if they had obtained legal counsel and protected their property rights.
Published reports indicate HSBC halted its foreclosures after the U.S. government reviewed the bank’s procedures. HSBC’s annual report conceded the deficiencies.
HSBC was among the banks investigated last year. They were accused of not being fair to homeowners.
Not only were HSBC’s loan documentation processes criticized, the federal agencies condemned the bank’s evaluation and monitoring of its legal representatives.
HSBC vows to recommence its foreclosures once it corrects its weaknesses. However, the bank concedes its foreclosure rate might be slowed by other state and federal investigations.
The bank also anticipates such investigations will also impact its earnings as a result of possible fines and other penalties.
Despite the slowdown in foreclosures following the U.S. investigation, RealtyTrac reports there were over 1 million foreclosures in 2010.
Read about the investigation of HSBC: http://www.komonews.com/news/business/117248533.html