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HSBC to Pay $550 Million in Mortgage Case

Jaclyn Jaeger | September 15, 2014

London-based HSBC Holdings agreed this week to pay $550 million to the Federal Housing Finance Agency to resolve allegations that it misrepresented the quality of mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis.

The lawsuit, FHFA v. HSBC North America Holdings, filed in the U.S. District Court for the Southern District of New York resolves allegations that HSBC Holdings misrepresented to Fannie Mae and Freddie Mac that loans underlying mortgage-backed securities sold from 2005 to 2007 complied with underwriting guidelines.

In resolving the lawsuit, HSBC will pay $374 million to Freddie Mac and $176 million to Fannie Mae. The bank, however, did not admit any liability or wrongdoing. “To the...

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