HSBC fined over 'contaminated' home loans

By John-Paul Ford Rojas, business reporter
HSBC sold "contaminated" home loans to investors in the run-up to the financial crisis according to allegations set out by the US Department of Justice (DoJ) as it confirmed a $765m (?582m) penalty for the bank.
The claims relate to the banking giant's handling of residential mortgage backed securities (RMBS) from 2005 to 2007.
HSBC, which revealed the scale of the expected settlement in August, becomes the latest big bank to agree a fine over the sale of toxic debt in the years leading up to the crisis.It follows a $4.9bn penalty for Royal Bank of Scotland and a $2bn pay-out for Barclays.Bob Troyer, US attorney for the District of Colorado, said: "HSBC made choices that hurt people and abused their trust."HSBC chose to use a due diligence process it knew from the start didn't work. It chose to put lots of defective mortgages into its deals."When HSBC saw problems, it chose to rush those deals out the door. When deals went south, investors who trusted HSBC suffered."And when the mortgages failed, communities across the country were blighted by foreclosure."
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