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Attorney general sues HSBC over foreclosure law

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Chris Caya/WBFO News
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HSBC Bank is being sued by State Attorney General Eric Schneiderman, who says he has found hundreds of local homeowners have been kept from negotiating an alternative to foreclosure.

Schneiderman says the process mandates that lenders who sue to foreclose on a homeowner are required to attend a settlement conference within 60 days. He says HSBC failed to follow the law, keeping some homeowners waiting more than two years.

Across the state, Schneiderman says thousands of foreclosure cases are languishing months and even years because of delays by financial instutions.

"This is about equal justice under law. This is about saving our homeowners. This is about putting New York on the right track to financial recovery and restoring the public's confidence that there is one set of rules for everyone," Schneiderman says.

The AG says HSBC is just the first step and he is vowing to go after other banks, no matter where they are located.

"If you do business in New York State, if you lend money to New Yorkers [and] you make money off of our homeowners and you fail to give them their basic legal rights, we will go after you. We don't care where your headquarters is," Schneiderman says.

Schneiderman filed the necessary paperwork in Erie County Hall Tuesday morning.

WBFO News requested a statement from HSBC in response to the lawsuit.  The following was sent to our newsroom from Neal McGarity, Vice President and Senior Manager/ Media Relations at HSBC North America in New York City:

"HSBC is committed to compliance with all applicable laws, which includes those related to foreclosure. We will respond appropriately to the State AG in this matter."