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UK Bank HSBC to Pay $550MN to Resolve FHFA Suit

newjerseytelegraph.com | September 17, 2014

WASHINGTON/ LONDON - The British bank HSBC has agreed to pay $550 million (338 million pounds) to US regulators to resolve claims of having made false representations in selling mortgage bonds to Fannie Mae and Freddie Mac before the financial crisis.

The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac Friday announced that it had reached an agreement with HSBC North America Holdings Inc., related companies and specifically named individuals (HSBC) to resolves claims in the lawsuit FHFA v. HSBC North America Holdings Inc., et al. (S.D.N.Y.), alleging violations of federal, Virginia and District of Columbia securities laws.

The case relates to private-label mortgage-backed securities purchased by Fannie Mae and Freddie Mac during 2005-2007.

The lawsuit had accused HSBC of making $6.2 billion of mortgage-backed securities look like they met regulatory guidelines and standards, when they did not. A charge HSBC has previously denied.

Pursuant to the agreement, HSBC will pay $374 million to Freddie Mac and $176 million to Fannie Mae.

Only two of the 18 lawsuits FHFA filed in 2011 have not been resolved

Fannie Mae and Freddie Mac lost more than $30 billion in the financial crisis, partly because of their investments in the subprime mortgages. The two state-owned entities were bailed out by the US government during the crisis.

HSBC is the 16th bank to reach an agreement with FHFA over the issue. is Compared to $9.5 billion settlement reached by of US banking giant Bank of America with the FHFA last March, HSBC has been levied a lower penalty.

Along with settlements with other banks including Deutsche Bank and Morgan Stanley, FHFA has so far recouped $17.9 billion.

Last month, Goldman Sachs Group Inc agreed to a settlement that the FHFA valued at $1.2 billion.

Royal Bank of Scotland and Nomura have yet to settle their cases.

The deal with HSBC came after the bank lost a bid last month to dismiss the case as untimely, in light of a recent US supreme court ruling.

Many of the banks settled after Denise Cote, the US district judge who has overseen most of the FHFA litigation, issued several rulings making it harder to mount defences, reported the Reuters news agency

HSBC said it was "pleased to resolve the matter"..

Lawsuits remain pending against Nomura Holdings and Royal Bank of Scotland Group. The FHFA said it "remains committed to satisfactory resolution of these actions."


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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