Wednesday, June 5, 2013

New York AG Sues HSBC, Alleging Failure to Follow Foreclosure Law

This seems to be another underhanded tactic by many lenders. The banks have more money, legal access and time than the borrower. "Waiting out" the borrower by not filing the RJI to ask for the court's intervention is just another method lenders use to make sure they have an unfair advantage. The AG has done a great job protecting New York borrowers. 

- John Brancato, Loss Mitigation
Robert E. Brown, PC

HSBC faces a lawsuit from New York Attorney General Eric T. Schneiderman, who accused the bank of failing to follow a state foreclosure law that mandates a settlement conference for past due borrowers.

“Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” said Attorney General Schneiderman. “For homeowners facing foreclosure, time is their greatest enemy. Every day spent waiting for a settlement conference is a day that the lender piles on additional interest, fees and penalties and the homeowner falls further behind.”

According to the statement, the investigation from the attorney general’s office resulted in the identification of nearly 300 instances of delayed RJI filings in four New York counties— Erie, Monroe, Suffolk and Bronx. In some cases, the office says homeowners waited for two years for the bank to file the RJI.

According to first quarter data from RealtyTrac, New York has the longest foreclosure timeline out of any other state at 1,049 days.

“Although identifying these cases takes significant resources, my office will continue to bring these types of cases until every homeowner in the shadow docket receives the relief they are legally entitled to,” added Schneiderman.

In an emailed statement to DSNews, an HSBC spokesperson said, “HSBC is committed to compliance with all applicable laws, which includes those related to foreclosure. We will respond appropriately to the State AG in this matter.”

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