HSBC to Pay $765m to Settle Mortgage-Backed Securities Claims
(Bloomberg) -- The U.S. Department of Justice says HSBC will pay $765 million to settle claims related to its packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities between 2005 and 2007.
- The United States alleged that HSBC had a due diligence process for reviewing the loans HSBC planned to securitize as RMBS, but as early as 2005, an HSBC credit risk manager expressed concerns with HSBC’s due diligence process.
- “HSBC made choices that hurt people and abused their trust,” said Bob Troyer, United States Attorney for the District of Colorado. “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."
- HSBC disputes and does not admit the allegations.
©2018 Bloomberg L.P.