On Friday, in an announcement the Justice Department said that HSBC has agreed to $470 million settlement with the federal government along with almost all states related to issues of mortgage lending and foreclosure abuses which the officials opine aided in deepening the financial crisis in the country almost eight years ago.
According to the agreement, the bank has to pay $100 million along with providing additional $370 million towards consumer relief for borrowers and homeowners. It also includes reducing mortgage interest rates and principal on mortgages for those homeowners who face possibility of default. The agreement also requires HSBC to improve its standards of servicing loans and handling its foreclosures.
According to the officials, these alterations will help in discouraging earlier banking practices like robosigning and loans of poor-quality which worsened the financial which affected millions of Americans who lost their homes to foreclosure.
In a statement, head of the Justice Department's Civil Division, Benjamin Mizer, said, "This settlement illustrates the department's continuing commitment to ensure responsible mortgage servicing. The agreement is part of our ongoing effort to address root causes of the financial crisis."
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