WASHINGTON -- Banking giant HSBC has reached a $470 million settlement with the federal government and nearly all states over mortgage lending and foreclosure abuses, the Justice Department announced Friday.
The agreement requires the bank to pay $100 million and to provide an additional $370 million in consumer relief to borrowers and homeowners, including reduction of mortgage interest rates as well as the principal on mortgages for homeowners who are at risk of default.
The deal also requires the bank to improve standards for how it services loans and handles foreclosures.
Officials say those changes are intended to discourage past banking practices, such as robosigning and poor-quality loans that exacerbated a financial crisis starting in 2007 in which millions of Americans lost their homes to foreclosure.
"This settlement illustrates the department's continuing commitment to ensure responsible mortgage servicing," Benjamin Mizer, head of the Justice Department's Civil Division, said in a statement. "The agreement is part of our ongoing effort to address root causes of the financial crisis."
The settlement involves the departments of Justice and Housing and Urban Development, and the Consumer Financial Protection Bureau. Attorneys general from 49 states, including Arkansas' Leslie Rutledge, and the District of Columbia signed on.
A Section on 02/06/2016