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HSBC to pay $249M to settle foreclosure-abuse case

HSBC to pay $249M to settle foreclosure-abuse case

CREATED Jan 18, 2013

WASHINGTON (AP) -- British bank HSBC will pay $249 million to settle federal complaints that its U.S. division wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.

The agreement with the Federal Reserve and the Office of the Comptroller of the Currency is similar to deals with 12 other banks that ended a review of loan files required under a 2011 federal action. Combined, the 13 banks will pay $9.3 billion.

The settlements could compensate Americans whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The agreement will also help eliminate huge potential liabilities for the banks.

Consumer advocates say regulators settled for too low a price.