HSBC Bank USA, and its mortgage operations facility, are at the center of a lawsuit filed by New York Attorney General Eric Schneiderman, who alleges that thousands of people were denied the opportunity to save their home from foreclosure due to the bank’s misconduct.
Our Miami foreclosure defense lawyers know that this is not the only bank that has flagrantly disregarded its obligations in extending home loan modifications for borrowers and helping them to avoid foreclosure. But New York has been more aggressive than most other states at going after the offenders.
Schneiderman has been quoted as saying that he hopes this lawsuit will prompt other financial institutions engaging in similar tactics to take notice and do an about-face.
The state Supreme Court lawsuit alleges that bankers at HSBC blatantly ignored the law intended to guide homeowners toward settlements and modifications, rather than foreclosures. The bank is accused of intentionally ran out the clock on settlement negotiations to rake in bigger profits for themselves. Schneiderman said it’s clear that these were not isolated incidents, but rather part of a larger and calculated strategy intended to deny borrowers relief from foreclosure proceedings.
Just as an example, there were more than 200 cases in a single suburban jurisdiction where the bank delayed the settlement talks and as a result, consumers were forced into a foreclosure, rather than a loan modification. In more than a handful of those cases, the bank filed the required paperwork nearly three years late.
The state law in New York holds that lenders have to file a request for judicial intervention anytime they sue a homeowner for foreclosure, and they also have to issue a notification to the county clerk of that action. That initial request is supposed to trigger a settlement conference that is held within two months, which is intended to bring both sides to the table to try to resolve whatever the financial issue is before the homeowner is pushed down the path of a foreclosure.
But just last year, the state attorney general learned that there were approximately 25,000 homeowners that were directed to a foreclosure without ever having sat down for that settlement talk required by law.
Why would banks do this? Because every day that the homeowner is left waiting, he or she is racking up additional fees, penalties and back mortgage payments from the lender. So in effect, the bank makes money by denying the homeowner the right to fight for their home.
Among the orders of relief sought, the attorney general is asking that HSBC be forced to follow the state notification law, as well as waive all charges and interest fees levied on homeowners who weren’t given the opportunity to attempt to negotiate a settlement.
One example was a woman who suffered a severe illness and subsequently a job loss that led to the bank taking action to foreclose on her home. The bank reportedly filed a notice with the county, but then failed to notify the court to initiate a settlement discussion until more than 10 months after it first filed the foreclosure action. That delay meant this woman who had already suffered so much was slapped with an additional $23,000 in fees, which she wouldn’t have accrued had the bank initiated the process on time.
We don’t believe for a second that HSBC is the only bank that is guilty. That’s why if you believe you may be facing a foreclosure, you need to contact an experienced foreclosure defense attorney as soon possible. You need the opportunity not only to fully explore your options, but also to be apprised of your rights.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
Attorney general sues HSBC over foreclosures, June 4, 2013, By Tom Precious, Buffalo News
More Blog Entries:
Home Loan Modifications Slow Because of Banks’ Reticence, Report Says, June 3, 2013, Miami Foreclosure Lawyer Blog