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Massachusetts Attorney General Maura Healey has announced that HSBC will pay $4 million to settle charges relating to force-placed insurance policies that it procured for the state’s at-risk homeowners.
According to a statement released by Healey’s office, HSBC was accused of receiving compensation from the insurance company Assurant Inc. for the sale of the force-placed insurance policies despite the fact that HSBC’s tied to the force-placed insurance premiums charged to the company’s borrowers, with Healy stated violated state consumer protection laws. This practice ceased in June 2012.
Under the settlement, HSBC will pay $2.675 million in restitution to affected Massachusetts homeowners and $1.4 million directly to the state.
“Mortgage servicers should not enrich themselves through insurance products at the expense of struggling homeowners,” Healey said. “This agreement ensures that HSBC returns the money to Massachusetts consumers it received in violation of state laws.”