HSBC Halts U.S. Foreclosures After Joint Examination by Fed, OCC

HSBC Holdings Plc, Europe’s biggest bank, has suspended U.S. foreclosures following a joint examination by the Federal Reserve and the Office of the Comptroller of the Currency.

The regulators issued letters noting “certain deficiencies” in the processing, preparation and signing of affidavits and “other documents supporting foreclosures” at HSBC Finance Corp. and HSBC Bank USA, the London-based lender said yesterday in its annual report.

“We have suspended foreclosures until such time as we have substantially addressed noted deficiencies in our processes,” HSBC said in the report.

HSBC Bank USA Chief Executive Officer Irene Dorner said in October that the bank reviewed its U.S. foreclosure process and didn’t find evidence of so-called robo-signers, Reuters reported. Robo-signers refers to bank employees who submit hundreds or thousands of affidavits weekly to support foreclosures without proper review.

Bank of America Corp. and JPMorgan Chase & Co. were among lenders that temporarily halted or delayed some repossessions to review their foreclosure practices.

“We don’t think we have an issue with robo-signing,” Neil Brazil, an HSBC spokesman, said today in a telephone interview. “As a result of internal and external review, we have taken the decision to review all foreclosures where judgment has not yet been entered and will be refiling affidavits where necessary.”

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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