ALBANY, N.Y. – HSBC Bank USA and HSBC Mortgage Corp. failed to set timely foreclosure settlement conferences required by New York law, according to a lawsuit filed Tuesday by the state attorney general.
The law says mortgage lenders who sue to foreclose on residential homeowners have to request court-supervised intervention and then attend a settlement conference on possible loan modifications within 60 days. HSBC said Tuesday that it’s committed to complying with the law.
Court estimates show about 25,000 foreclosure cases statewide have languished for months because lenders have delayed filing the papers to trigger a conference while continuing to assess interest, fees and penalties, Attorney General Eric Schneiderman said. He said he’ll also sue other lenders.
“Although identifying these cases takes significant resources, my office will continue to bring these types of cases until every homeowner in the shadow docket receives the relief they are legally entitled to,” Schneiderman said. The requirement applies to mortgage banks, loan servicers and their agents.
The lawsuit filed in state Supreme Court in Erie County would require HSBC to waive those later charges and grant restitution. It seeks damages for homeowners hurt by HSBC’s practices.
“Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” Schneiderman said. “For homeowners facing foreclosure, time is their greatest enemy. Every day spent waiting for a settlement conference is a day that the lender piles on additional interest, fees and penalties and the homeowner falls further behind.”
The attorney general’s office said a sampling showed 300 HSBC cases in Erie, Monroe, Suffolk and Bronx counties.
“HSBC is committed to compliance with all applicable laws, which includes those related to foreclosure,” spokesman Neil Brazil said. “We will respond appropriately to the state attorney general in this matter.”