HSBC North America Holdings, the ninth-largest U.S. bank by assets, told investors Wednesday that the bank’s moratorium on home seizures continues in some jurisdictions and it will be “a number of months” before the bank fully resumes foreclosing on defaulted borrowers.
The lender did not specify in filings with federal regulators where it continues to restrict home repossessions or how many borrowers have been affected. HSBC handles more than 892,000 home loans, making it the 12th-largest mortgage servicer in the U.S., according to the Federal Reserve. HSBC initiated more than 43,000 home foreclosures in 2009 and 2010, according to the Fed.
The foreclosure freeze, which started last autumn, came on the heels of months-long criminal and civil probes by federal and state regulators into lenders’ faulty mortgage practices. The nation’s largest lenders voluntarily halted home repossessions when flawed document practices — like so-called “robo-signing” — came to light and erupted into a nationwide scandal. Officials subsequently found that the nation’s largest mortgage firms illegally seized the homes of at least dozens of borrowers and engaged in shoddy practices that allegedly deceived local courts, broke numerous state laws and federal rules, and short-changed distressed borrowers.
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