HSBC Investigation for Redlining However, Appraisers are the Problem

[PowApp]

So, we are under fire for Racial Bias...however, HSBC is under investigation.
Not a peep from anyone. Amazing, follow the money and follow the power!
Last, do not forget to read the last paragraph about fines already levied. Plus, HSBC has already paid over 600 million in past fines!!

But, of course it is the 88,000 real estate appraisers that are totally screwing the real estate market due to racial bias!!!!!!!!!!!!!!!!

HSBC Bank’s US arm is under investigation for redlining

HUD is investigating whether the bank violated the Fair Lending Act in six metropolitan areas from 2018 through 2021

August 3, 2023, 11:05 am By Flávia Furlan Nunes​

HSBC Bank USA on Tuesday disclosed that it is facing an investigation from the U.S. Department of Housing and Urban Development (HUD) for alleged redlining practices.

The federal investigation is based on a complaint filed by the non-profit organization National Community Reinvestment Coalition (NCRC).

According to filings with the Securities and Exchange Commission (SEC), HUD is investigating whether “HSBC Bank USA violated the U.S. Fair Lending Act by engaging in discriminatory lending practices in majority Black and Hispanic neighborhoods in six U.S. metropolitan areas from 2018 through 2021.”

The NCRC complaint includes six metropolitan areas: New York (NY), Seattle (WA), Orange County (CA), Los Angles (CA), Oakland (CA) and the Bay Area (CA).

A spokesperson for HUD said the agency “Does not comment on investigations or potential complaints.” HSBC did not reply to a request for comments.

A representative for NCRC said in a statement that when “NCRC or our members find evidence of redlining or any other form of lending discrimination, we take prompt action.”

“We are always concerned by data that suggests unfair treatment of disenfranchised communities and individuals, and always glad to help ensure the appropriate authorities have an opportunity to review the facts and pursue any remedies they deem appropriate.”

Per the mortgage tech platform Modex, HSBC originated about $2 billion in mortgages in the last 12 months. Purchases and conventional loans were more than 77% of the total. California and New York are the main markets for the bank.

That was the second time HSBC was questioned about its mortgage lending practices by federal agencies.

In 2016, the bank ended up paying a $601 million settlement to a series of federal agencies and nearly every state over charges that it engaged in mortgage origination, servicing and foreclosure abuses.

In a separate but related settlement, HSBC paid $131 million to the Federal Reserve. According to the Fed, the penalty considers the circumstances of HSBC’s “unsafe and unsound practices and foreclosure activities.”

U.S. regulators are active in investigating redlining cases.

In June, the U.S. Department of Justice (DOJ) announced a $3 million redlining settlement with ESSA Bank & Trust. It followed a $31 million settlement with City National Bank in January. In 2022, settlements were made with Trident Mortgage Co., Warren Buffet’s Berkshire Hathaway subsidiary; and Lakeland Bank.

 

[jay trotta]

Goes right along with this one.

Phony bank accounts reported at Wells Fargo​

Arkansas resident Jay Patterson received a bank statement from Wells Fargo in June 2022 that showed $12 in a checking account in his name. Immediately he was confused. He had never been a Wells Fargo customer, and he said he has never given the bank access to his personal data. It turns out he wasn’t the only one in this situation. More than 40 consumers say Wells Fargo accounts were opened in their name without their knowledge.

While the bank has been embroiled in similar activity before, what happened to Patterson appears to be a case of synthetic identity fraud. Senior financial reporter Gretchen Morgenson has more on the mystery accounts and explains what exactly synthetic identity fraud is.

PS: Instead, Patterson’s Wells Fargo account appears to be a case of synthetic identity fraud — when impostors create new identities using a combination of real and fake personal information, such as names, Social Security numbers, birth dates and drivers’ license numbers. They use these new identities to launder money, finance terrorism or defraud financial institutions, government agencies or individuals, according to a report by the Government Accountability Office.

Be careful who you give out information to.....

 

[sputnam]

It's more like appraisers are easy targets.

 

[glenn walker]

They will just pay a fine thats how the game works.

 

[Overimprovement]

All banks redline. Most are just better at making it look like they don't. But for the most part, it is based on factual information, like default rates, and monetary losses given default. They track this by zip code, census tract, etc. Why should a bank have to loan in a neighborhood where the average return on investment is well below zero? Banks only care about making money, and they will do it wherever and however they can. They will also spurn opportunities where it looks like they will lose money. Now some of their methods of making money is criminal, but I doubt they are fleeing money making opportunities.

Never is a 'do not loan' decision changed to 'yes' when the appraisal comes in. Yes decisions can turn to no depending on LTV, but the decision to loan had actually been made that point.

 

[shrubberyvaluation]

All banks redline. Most are just better at making it look like they don't. But for the most part, it is based on factual information, like default rates, and monetary losses given default. They track this by zip code, census tract, etc. Why should a bank have to loan in a neighborhood where the average return on investment is well below zero? Banks only care about making money, and they will do it wherever and however they can. They will also spurn opportunities where it looks like they will lose money. Now some of their methods of making money is criminal, but I doubt they are fleeing money making opportunities.

Never is a 'do not loan' decision changed to 'yes' when the appraisal comes in. Yes decisions can turn to no depending on LTV, but the decision to loan had actually been made that point.

This has been my biggest beef with the whole redlining. If its so profitable someone would loan there. Businesses, with some exceptions especially when getting government funding, want to make profits.