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February 5, 2016
For More Information, contact:
Luther Strange
Mike Lewis (334) 353-2199
Alabama Attorney General
Joy Patterson (334) 242-7491
Page 1 of 3

(MONTGOMERY)–Attorney General Luther Strange today announced a $470
million joint state-federal settlement with mortgage lender and servicer HSBC to
address mortgage origination, servicing, and foreclosure abuses.
The settlement provides direct payments to Alabama borrowers for past
foreclosure abuses, loan modifications and other relief for borrowers in need of
assistance, rigorous mortgage servicing standards, and grants oversight authority to an
independent monitor.
The settlement includes Alabama and 49 other states, the District of Columbia,
the U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban
Development (HUD), and the Consumer Financial Protection Bureau (CFPB).
“This agreement provides much-needed relief to eligible Alabama borrowers,
and puts a stop to many of the bad practices that have harmed consumers,” said
Attorney General Strange. “Through tough servicing standards, this agreement
compels HSBC to abide by more fair procedures.”
HSBC Agreement Closely Mirrors National Mortgage Settlement
The agreement’s mortgage servicing terms largely mirrors the 2012 National
Mortgage Settlement (NMS) reached in February of 2012 between the federal
government, 49 state attorneys general, including Alabama, and the five largest national
mortgage servicers. That agreement provided consumers nationwide with more than
$50 billion in direct relief, created new servicing standards, and implemented
independent oversight.
A subsequent state-federal agreement with SunTrust Mortgage Inc. worth nearly
$1 billion was announced in June of 2014.

501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.state.al.us Page 2 of 3

Loan Modifications
The HSBC agreement requires the company to provide certain borrowers with
loan modifications or other relief. The modifications, which HSBC chooses through an
extensive list of options, include principal reductions and refinancing for underwater
mortgages. HSBC decides how many loans and which loans to modify, but must meet
certain minimum targets. Because HSBC receives only partial settlement credit for
many types of loan modifications, the settlement will provide relief to borrowers that
will exceed the overall minimum amount.
Payments to Borrowers
Approximately 1,094 eligible Alabama borrowers whose loans were serviced by
HSBC and who lost their home to foreclosure from January 1, 2008, through December
31, 2012, and encountered servicing abuse will be eligible for a payment from the
national $59.3 million fund for payments to borrowers. The borrower payment amount
will depend on how many borrowers file claims.
Eligible borrowers will be contacted by a settlement administrator about how to
qualify for payments.
Mortgage Servicing Standards
The settlement requires HSBC to substantially change how it services mortgage
loans, handles foreclosures, and ensures the accuracy of information provided in federal
bankruptcy court. The terms will prevent past foreclosure abuses, such as robo-signing,
improper documentation and lost paperwork.
The settlement’s consumer protections and standards include:

  • Making foreclosure a last resort by first requiring HSBC to evaluate homeowners
    for other loss mitigation options;
  • Restricting foreclosure while the homeowner is being considered for a loan
  • Procedures and timelines for reviewing loan modification applications;
    codydaffinson@Dogwoods-MacBook-Pro ~ % node AGO.js
    February 5, 2016
    For More Information, contact:
    Luther Strange
    Mike Lewis (334) 353-2199
    Alabama Attorney General
    Joy Patterson (334) 242-7491
    Page 1 of 2

(MONTGOMERY) – Attorney General Luther Strange announced Alabama is spearheading a
coalition of 13 states opposing the Obama administration’s proposed Persuader Advice
Exemption Rule that could force small businesses to disclose communications with outside
counsel in labor relations matters.
In a letter to the U.S. Office of Management and Budget, Attorney General Strange and 12 other
Attorneys General voiced opposition to the Obama administration’s proposed new rule which
they say will undermine long-standing protections for confidential attorney-client
communications and would place undue burdens on small business which would be singled
out under the rule.
“For more than 50 years, the Labor Management Reporting and Disclosure Act (“LMRDA”) has
preserved the confidentiality of attorney-client communications by exempting attorney advice
relating to labor relations issues from disclosure generally, and specifically, by exempting
confidential attorney-client interactions. This new rule, however, would undermine these
protections by requiring the reporting of advice related to the persuasion of employees,
regardless of whether the lawyers who provide the advice communicate with anyone other than
their clients,” the Attorneys General wrote.
They further noted that impact of the proposed rule effectively targets small business.
“The new rule would cause particular harm to small business in our states. The reporting
requirement applies specifically to outside consultants. Because many large corporations
employ in-house counsels, they will have access to legal advice on labor matters, free of the
disclosure concerns raised by the new rule. Small businesses, by their very nature, are less
likely to employ an in-house counsel. The burden of this new rule will fall chiefly on them,
with heavy penalties if they fail to comply.”
Attorney General Strange noted that the Obama administration’s proposed new labor rule is an
assault on a sector of the economy which is vital to economic growth and jobs.

501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.alabama.gov Page 2 of 2

“Small businesses make up over 90 percent of all businesses both in Alabama and across
America,” Attorney General Strange said. “These local job providers can least afford further
unwarranted federal mandates that will erode their ability to compete. I have joined with my
fellow Attorneys General to stand up for fairness and protect small businesses from this
unnecessary federal overreach.”
The letter was signed by Attorneys General from Alabama, Arizona, Arkansas, Georgia, Idaho,
Kansas, Louisiana, Michigan, Nevada, Oklahoma, South Carolina, South Dakota and West

Letter is attached to this release