HSBC Holdings has confirmed it reached a multi-million dollar settlement with the Federal Housing Finance Agency. The bank was the most recent financial institute to settle lawsuits based on mortgage bonds that were filed back on 2011.
HSBC said it would pay $550 million to settle. A worldwide news journal had estimated earlier that the settlement was for a reported $500 to $600 million.
HSBC North America General Counsel and senior executive VP Stuart Alderoty said that the bank was pleased it had resolved the matter.
The settlement by HSBC was less than many of the other banks involved to resolve the claims made by FHFA. In August, Goldman Sachs Group was able to reach a settlement deal with regulators with the deal valued at approximately $1.2 billion.
On August 4 of this year, HSBC the London-based financial institute said its net profit during the first six months of this year fell to just over $9.46 billion, which was expected by Wall Street analysts following a poor first three month for a certain number of its businesses.
Douglas Flint the chairman at the bank said the numbers showed a financial performance that was suitably balanced, during a time of low interest rates and lower financial market volumes.
The FHFA in 2011 filed suit against 18 banks in an attempt to recoup costs to taxpayers after the United States had seized control of mortgage finances companies that had failed in 2008.
Seven companies, including Deutsche Bank AG and JPMorgan Chase agreed to a combined settlement of more than $8 billion. The settlement settled the claims the banks misrepresented the mortgages supporting the securities purchases by Freddie Mac and Fannies Mae just before the start of the financial crisis.