In recent months, many big mortgage lending banks have suspended their foreclosure operations in the face of discoveries of inadequate foreclosure documentation. Now, just when the wave of foreclosure suspensions had seemed to be drawing to a close, another big mortgage lender is suspending its foreclosure actions.

London-based HSBC Holdings PLC has suspended foreclosures in the U.S. The bank has extensive mortgage holdings in the United States. The move came just after HSBC revealed in mandatory filings with the Securities and Exchange Commission that the bank will very likely face sizable federal fines in the near future due to its shoddy documentation practices on foreclosures.

The SEC filing revealed that HSBC has received letters from the Comptroller of the Currency and the Federal Reserve saying that the bank has serious problems with the processing, preparation and signing of affidavits and other documents supporting foreclosures.

HSBC has suspended foreclosures in Florida and across the U.S. "until such time as we have substantially addressed the noted deficiencies." HSBC is also reviewing foreclosures that have been processed but where judgment hasn't been entered yet. They say they will correct any deficient documentation filed in those cases.

Fort Lauderdale "stop foreclosure" attorneys noted that as recently as November of last year, HSBC had said it had "no concerns with its processes" and was moving ahead with all of its foreclosure actions.

Source: Wall Street Journal "HSBC Halts Foreclosure Filings in U.S." 3/1/2011