HSBC has agreed to pay $470m to federal and state parties to settle allegations over abusive practices in its US mortgage lending, loan servicing, and foreclosure practices that contributed to the financial meltdown.
The settlement comes after a probe launched in 2010 found the bank to sign off mortgage foreclosures without adequate review.
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Under the settlement, the bank will have to pay $100m in cash to federal and state parties, and $370m in consumer relief.
The consumer relief will require HSBC to offer lower interest rates and reduced principal for borrowers at risk of default.
The settlement also requires the bank to amend some of its policies, such as offering homeowners the chance to appeal foreclosures.
Acting Associate Attorney General Stuart Delery said: "This agreement is the result of a coordinated effort between federal and state partners to hold HSBC accountable for abusive mortgage practices.
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By GlobalData"This agreement provides for $370 million in creditable consumer relief to benefit homeowners across the country and requires HSBC to reform their servicing standards. The Department of Justice remains committed to rooting out financial fraud and holding bad actors accountable for their actions."
