HSBC Holdings PLC is the suspension of foreclosures in the U.S. following a review of governance procedures of the lender revealed problems with how they handled some foreclosures.
moratorium, the London-based bank in a foreclosure came to light in its annual report on Tuesday.
HSBC said the U.S. government officials determined that there were some shortcomings in the way the provider affidavits and other documents prepared in foreclosures.
"We have suspended executions pending the correction of deficiencies," the company said in the report.
The lender said it will resume enforcement action once it has dealt with the problems.
state officials and U.S. federal investigations began last fall in the enforcement procedures used by mortgage servicers and lenders, including HSBC Finance and HSBC Bank USA.
The probes followed revelations in September that some major banks to ram through hundreds of foreclosures a day, without giving many borrowers a fair chance to keep their homes.
Shortly thereafter, several major providers decided to temporarily freeze foreclosures will be reviewed and, in some cases re-filed foreclosure papers.
This helped reduce the rate of foreclosures at the end of last year, but the providers, although it took a record of more than 1 million households in 2010, according to foreclosure listing service RealtyTrac Inc.
HSBC said it has cooperated with the review, including a joint review by officials of the Federal Reserve Board and the Office of the Comptroller of the Currency.
In addition to finding problems with company procedures foreclosure documentation, the researchers also disagrees with the way HSBC assess and control the law firms hired to handle foreclosure on behalf of the bank, the lender said .
management of HSBC, said it was reviewing all the foreclosures that have not been completed and will take steps to solve the problems of documentation and resubmit paperwork as needed.
The lender said it expects the scrutiny of the foreclosure process to increase due to ongoing probes state and federal foreclosure practices.
As a result, the bank expects there could be more delays in the foreclosure process.
Meanwhile, HSBC said it expects to receive orders before detailing what he has to do to fix their foreclosure proceedings.
These orders have the potential to increase the company's "operational risk profiles, reputational and legal" and will require significant management resources to carry out, HSBC said.
