HSBC Is Sued by U.S. Borrowers Over Mortgage Insurance
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HSBC Holdings Plc’s U.S. unit was sued in Philadelphia by homeowners in three states over claims that the bank took kickbacks from private mortgage insurers.
Five homeowners in Pennsylvania, North Carolina and Maryland sued alleging the company violated real estate laws by collecting more than $84 million from private mortgage insurers while paying only about $7.9 million toward purported reinsurance claims. Referral payments made to HSBC’s affiliated captive reinsurer HSBC Reinsurance Inc. were illegal, according to a complaint filed Jan. 4 in federal court in Philadelphia.