Wednesday, May 11, 2011
HSBC to maintain its freeze on foreclosures in some areas for now
The nation's 12th largest mortgage servicer and 9th largest bank informed investors last Weds. that the moratorium on foreclosures that has been in place since sometime last autumn will continue for at least a number of months before it resumes foreclosing on defaulted loans. The moratorium came about due to government probes into illegal and faulty loan practices...such as "robo-signing" as it is popularly called when their employees would blindly sign many, many documents without checking the accuracy of the alleged defaults on the loans and other deceptive practices. In April it was one of 14 mortgage companies sanctioned by the Federal Reserve Bank and the Office of Comptroller of the Currency due to their erroneous and illegal procedures. More than 43 thousand home foreclosures were initiated in 2009 -2010. Considering the state of the economy and the housing market 2011 will be yet another banner year for this lender as well as others. The Obama administration and some state authorities are pushing for fines nearing the $30 billion mark in reaction to the past abuses to delinquent borrowers by HSBC and other lenders.