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HSBC reaches $10M settlement over foreclosure charges

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HSBC Foreclosure Settlement
Photo by Bloomberg

(Reuters) — HSBC Holdings Plc. has agreed to pay $10 million to settle U.S. civil fraud claims over foreclosure-related charges it submitted to the government, federal prosecutors said on Tuesday.

The accord resolves claims under the False Claims Act concerning government allegations that HSBC failed to oversee the reasonableness of the charges it submitted to the U.S. Department of Housing and Urban Development's Federal Housing Administration and Fannie Mae.

HSBC spokesman Rob Sherman declined immediate comment.

The office of Manhattan U.S. Attorney Preet Bharara, which announced the settlement, has been investigating several banks over whether they overcharged the government for expenses incurred during foreclosures on federally-backed home loans.

These loans are either insured by the Federal Housing Administration, which is part of HUD, or guaranteed by government-controlled mortgage companies Fannie Mae and Freddie Mac.

A typical foreclosure can cost $1,000 to $3,000, with much of the sum going to legal fees.

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