HSBC share price: Bank to pay $470 million in US settlement of mortgage ‘abuse’ claims
HSBC Holdings Plc (LON:HSBA) has agreed to pay $470 million as part of a settlement with US authorities over allegations of past “abusive” mortgage practices, covering loan origination, servicing and foreclosure.
Under the settlement, which was announced last week, HSBC will provide $370 million in customer relief, while the remaining $100 million will be split among three areas: $40.5 million will go to the settling federal parties; $59.3 million will be used to make payments to borrowers who lost their homes to foreclosure between 2008 and 2012; and the remaining $200,000 will be used to cover costs of investigations conducted by state attorneys.
As part of the deal, HSBC also agreed to be bound to mortgage servicing standards and be subject to independent monitoring of its compliance with the agreement. These standards are designed to prevent “foreclosure abuses” from recurring.
“We are pleased to have reached this settlement and believe it is a positive result that benefits American homeowners and the US housing industry,” said Kathy Madison, chief executive officer of HSBC Finance Corp, as quoted by Alliance News. She also added that “this agreement affirms our commitment to assisting customers who are facing financial difficulties”.
In today’s trading, HSBC shares were up 0.4 percent at 440.25p, as of 08:15 GMT. The stock has fallen 17.8 percent since the start of the year and the company’s market capitalisation currently stands at £86.7 billion.
As of Feb 08, 2016, the consensus forecast amongst 27 polled investment analysts covering HSBC had it that investors should hold their position in the company. The same consensus estimate has been maintained since January 20, 2016, when the sentiment of investment analysts deteriorated from “outperform”.
As of 09:26 GMT, Tuesday, 09 February, HSBC Holdings plc share price is 440.38p.
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