WASHINGTON, Jan. 18 (Xinhua) -- Banking giant HSBC has agreed to pay 249 million U.S. dollars to borrowers in a settlement with U.S. federal regulators for its foreclosure abuse practices, U.S. Federal Reserve announced on Friday.
The sums paid by HSBC include 96 million dollars in direct payments to eligible borrowers and 153 million dollars in other mortgage assistance including loan modifications, according to the agreement inked between HSBC, the Fed and the Office of the Comptroller of the Currency (OCC).
Eligible borrowers are expected to receive compensation ranging from hundreds of dollars to as much as 125,000 dollars, the U.S. central bank said in a statement.
The settlement agreement is similar to the ones inked earlier this month between 12 large U.S. banks and mortgage servicing companies and the federal watchdogs.
With the addition of HSBC, nearly 4.2 million U.S. borrowers will receive a total of 3.6 billion dollars in cash compensation while an additional 5.7 billion dollars will be provided by the servicers for mortgage assistance, said the central bank.
In 2011, major financial companies in the United States were cited for deficiencies in document handling and foreclosure abuses by federal watchdogs. Staff members of some banks rubber-stamped on piles of foreclosure documents instead of checking the accuracy of each one, a practice dubbed as "robo-signers".