By Aruna Viswanatha
WASHINGTON (Reuters) - The U.S. arm of HSBC Holdings Plc
HSBC agreed to pay $96 million to eligible borrowers who lost their homes to foreclosure in 2009 and 2010, and provide $153 million in other assistance, including loan modifications and forgiveness.
London-based HSBC said in a statement it was pleased to have reached the agreement and expects to record a pre-tax charge of $96 million in the fourth quarter of 2012 for the cash portion of the settlement. The bank said it expected to cover the loan assistance through existing reserves.
The settlement, with the Office of the Comptroller of the Currency and the Federal Reserve Board, is the 13th the agencies have reached this month.
They stem from reviews of individual loan files the regulators ordered in 2011 and 2012, after widespread mistakes were discovered in the way mortgage servicers had processed home seizures.
The reviews, initially expected to determine which borrowers were harmed and to compensate them based on their individual experiences, proved slow and expensive.
Ten banks, including Bank of America
On Wednesday, Goldman Sachs
Around 112,000 borrowers whose homes were in foreclosure with HSBC Bank and other HSBC subsidiaries will receive some cash, regulators said.
Regulators said last week the payouts will be based on whether a borrower falls into one of 11 categories. The categories include whether the person was eligible for protections under the Servicemembers Civil Relief Act, whether the borrower was not in default, or whether he or she was denied a loan modification.
The Fed and OCC are expected to reach similar agreements with other servicers that had been asked to conduct the reviews, including Ally Financial Inc
The settlement come s a little over a month after HSBC agreed to pay a record $1.9 billion to resolve criminal charges that it let itself by used to drug cartels and others to launder illicit funds.
(Reporting By Aruna Viswanatha; Editing by Gerald E. McCormick, Steve Orlofsky and Tim Dobbyn)