HSBC Agrees To Pay $765 Million In Connection With Its Sale Of Residential Mortgage-Backed Securities
The United States Attorney’s Office in Denver announced today that HSBC will pay $765 million to settle claims related to its packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities (RMBS) between 2005 and 2007.
Federally insured financial institutions and others suffered major losses from mortgage-backed securities abuses by HSBC. HSBC will pay the $765 million as a civil penalty pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
United States Attorney Bob Troyer said:
HSBC made choices that hurt people and abused their trust. HSBC chose to use a due diligence process it knew from the start didn’t work. It chose to put lots of defective mortgages into its deals. When HSBC saw problems, it chose to rush those deals out the door. When deals went south, investors who trusted HSBC suffered. And when the mortgages failed, communities across the country were blighted by foreclosure. If you make choices like this, beware. You will pay.