In HSBC's 2010 annual report, the bank asserted that it had stopped "processing foreclosures" and that it "suspended foreclosures" in December, even though the information wasn't made public until Feb. 28, when HSBC (HBC) filed the report with the SEC.

But based on at least two cases still working their way through Florida's courts, that delay in disclosure apparently also meant that HSBC didn't tell attorneys bringing foreclosure actions in the bank's name to put their cases on hold. Indeed, if HSBC had systematically put its many pending foreclosure cases on hold in December, the news surely would have come out before now. So it's appropriate to ask: What does the moratorium announcement really mean?

HSBC has also repeatedly asserted that it doesn't robo-sign. Despite those denials, HBSC's annual report concedes foreclosure document problems that certainly sound like those caused by robo-signing: "certain deficiencies in the processing, preparation and signing of affidavits and other documents supporting foreclosures. . .including the evaluation and monitoring of third-party law firms retained to effect our foreclosures."

Even if that language refers to something other than robo-signing -- and frankly, anything else it could refer to would be worse -- the servicer foreclosing in HSBC's name in the two cases below is using robo-signed documents. So, is it really valid to say HSBC doesn't robo-sign? (That's a claim the bank made again this week, after the annual report was released.)

What Else Can This Mean?

The two issues are linked, because the document "deficiencies" were significant enough to trigger HSBC's alleged moratorium: "We have suspended foreclosures until such time as we have substantially addressed the noted deficiencies in our processes," wrote the bank. "We are also reviewing foreclosures where judgment has not yet been entered and will correct deficient documentation and re-file affidavits where necessary."

As far as I can tell, there's no way to manipulate those sentences to mean: "We've got real problems with our documents, but we're going to let all our pending cases go forward -- we just won't file new cases until we've solved our problems." But based on how easy it was to find two HSBC foreclosure cases involving robo-signed documents that aren't on hold, and the fact that the "moratorium" didn't become public in the first few months of its existence, it seems that interpretation is closer to the truth.

HSBC had not replied to a detailed request for comment by deadline. If it replies, we will update this story.
UPDATE: Late Friday afternoon, Neil Brazil, HSBC North America's vice president of public affairs, responded: "In cases where HSBC is acting solely as trustee for a trust which holds a mortgage loan, HSBC does not service those loans, a master servicer does and has the authority to handle matters such as foreclosures. You would need to review any foreclosure matters with them."

The statement about the master servicer is true, of course -- but irrelevant. Even in those cases, the foreclosures are being done in HSBC's name, and the proceeds go to the trusts HSBC administers. For the bank to wash its hands of what its agents are doing in its name just doesn't fly. To illustrate the point, let's take a look at those two active foreclosure cases in Florida.

Two Cases that Challenge HSBC's Storyline

In two active Florida cases, Wells Fargo is trying to foreclose as the loan servicer for HSBC, which is the plaintiff and will, if the foreclosures are successful, get the properties. The case names reflect HSBC's role: HSBC v. Harley, and HSBC v. Shinneman. Both are set for trial later this month, and as of March 3, had not been not affected by HSBC's foreclosure moratorium.

Jacksonville Legal Aid attorney April Charney represents Harley, while attorney Todd Allen represents Shinneman. Both reached out to their opposing counsels repeatedly after the HSBC moratorium became public. Both opposing counsels told them on Thursday that the cases were going forward. (When I contacted the attorney for HSBC in the Shinneman case, Travis Harvey, his response was "no comment." HSBC's attorney in Harley, Michael Winston, didn't reply to my email.)

It has been three months since December, when HSBC says it began its "moratorium." Surely the bank has a list of all the foreclosure actions being taken in its name. In the age of email, sending a mass communique to all the necessary parties to halt those foreclosures shouldn't take this long.

Robo-Signed Documents in HSBC Cases

In Shinneman, the affidavit of indebtedness -- the document HSBC gives the court to prove how much Shinneman is in default, justifying the foreclosure -- is signed by known robo-signer Xee Moua (see pp. 28-29). If you look at the document, don't be confused by the fact that Moua says she works for Wells Fargo. Wells services the loan, but it's HSBC foreclosing -- check out the case caption on the top of the document. So, even if the robo-signer acted at Wells Fargo's request, the robo-signed document is being used by HSBC to foreclose on a home.

Similarly, in Harley, the assignment of mortgage was signed by Cheryl Samons of the infamous David Stern law firm, also a known robo-signer. Again, the assignment is from Wells to HSBC via MERS, but that doesn't insulate HSBC from the robo-signing. First, MERS assignments of mortgage are often done by employees or agents of the company receiving the assignment. In this case, that's HSBC. But even if Wells created the robo-signed assignment (by hiring Stern), the document is still being used by HSBC to foreclose on the home.

HSBC's annual report asserted the purpose of the foreclosure moratorium was in part to review and correct documents in pending foreclosure actions. Both the Shinneman and Harley cases are ones HSBC might want to review. The homeowners in each have challenged the validity of the papers, specifically the right of HSBC to foreclose.

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In Harley, the mortgage was securitized, and the homeowner argues the securitization contracts prevented HSBC from taking ownership of the loan in January 2006, when it claims it did. Beyond that, the robo-signed assignment of mortgage from MERS also supposedly assigned the promissory note, though it's unclear how that can be because MERS doesn't own notes. Most basically, the assignment was signed after the foreclosure had begun, and in Florida a plaintiff must have the right to foreclose when it file suit. Plaintiffs can't "fix" the issue later.

In Shinneman, among other issues, the note was not endorsed in a way that gave HSBC standing when the foreclosure was filed. Recently, however, a version with a new endorsement has appeared. (New endorsements have appeared in many foreclosure cases across the country.)

What Does "We" Mean?

So again I ask: What does the bank's moratorium really amount to? And will HSBC continue to insist it isn't robo-signing documents? If so, what were the document "deficiencies" it disclosed in its annual report? And how does it justify the statement in light of robo-signed documents being used in its name to foreclose?

HSBC's "we don't robo-sign" is as lawyerly an evasion as President Bill Clinton's infamous line, "it depends what the meaning of the word 'is' is." In this case, the bank appears to be trying to skate away on the definition of the word "we." But paying someone else to do the robo-signing and foreclosing for you doesn't get you off the hook.

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I just saw randmyan's comment from March, its ludicrous to think you are ever going to understand what happened here. If you read my post your comment about "all those people who are paying their loans and are not in default have no problem with their documents it's only those who are in default that are challenging the banks in every way possible so they don't have to give back what they didn't pay for" completely ignored that I stated at the time I was never in default, was paying my mortgage on time every month. There are millions of homeowners out there that were foreclosed on for the wrong reasons, if you can't understand that you are a pretty ignorant individual. Or maybe you just work for lenders, hell I don't know. The bottom line for us was they lied to us about the terms of our mortgage, we signed for a fixed rate mortgage and three years later they raised our mortgage payments deliberately and fraudulently altered our Note to reflect what they needed to have to securitize and sell our loan on the open market to unsuspecting investors. When I produced the real Note to Wells Fargo representatives, they disclaimed it and told me I had an ARM and my payments were going up to $2700 a month! I actually believed them for a while, then I started looking at my documents and pulling all the paperwork out of file cabinets. When I had the truth in front of me, it was obvious they were trying to hide significant details of my mortgage and override any opposition. I tried to get a refinance to control the escalating mortgage payments, they refused. I tried to get a loan modification, they refused and strung me along for over a year. I tried to resolve this in any way I could, and I lost my farm anyway. How dare you say I am irresponsible and looking for a free ride? I've paid on this farm through three different predatory loans for almost 30 years. For you to just make assumptions based on what you THINK you understand makes you an idiot. Fraud is fraud, and numbers don't lie.

August 01 2011 at 9:46 PM Report abuse rate up rate down Reply

1st, I am actively involved in litigation regarding the same issue. Hsbc is the name of the alleged trustee, Wells is the alleged servicer, and robosigned documents from Xee Moua, and Linda Hoover, as well as an undated, photocopy of an 'allonge' with 'Hsbc ...' stamped in the margin, is being used as rights to act.
I am in Maryland. They (Wells) supposedly dropped (and quickly refiled), cases where robosigned documents were used late last year after the Class action by Civil Justice was brought. They did NOT drop my case.

We are fighting the good fight, and in the middle of it. (Actually they, :atty's for Wells/Hsbc want to dismiss my case at this time. I am opposed, as they want to do so to refile without the Xee Moua document. It goes way deeper than that.)

Anyway, those in a similar situation should seek counsel as soon as possible. Also, if you are fighting an Alleged Trust, then information is king. Search for loan level data on the trust to see if the trust was dissolved, or paid off via Credit Default Swaps, or Tarp, or ? In my case I believe it was dissolved after being paid off. (Fitch gave it a rating of junk in 10/10 after S&P / Moodys gave it AAA ratings prior. )

Fight the good fight. Challenge everything. Do not assume anything. They will lie, cheat, and perjur themselves to win. And, they are DEATHLY afraid of prescedent.

May 12 2011 at 12:14 PM Report abuse rate up rate down Reply

I read this article and I think Abigail should do some research on the fraudulent foreclosure mill attorneys in Colorado, Castle, Meinhold & Staiwarski. They do 655 of the foreclosures in Colorado, I recently lost my farm of thirty years and had to file a lawsuit against both HSBC and Wells Fargo to get justice. Contrary to what people like "randmyan" are thinking (mainly because they just don't get it), I was never behind on my mortgage payments until late 2009, and I was told I had to be three months behind to get a loan modification after I was refused a refinance on an ARM loan I did not have. I signed for a fixed rate thirty year mortgage and was contacted in Jan 2009 that my loan was about to "adjust" up. I told Wells Fargo I did not have an ARM loan. I spent the next seven months trying to get this mess straightened out, spend thousands of dollars on a forensic audit, spent thousands more fighting Wells Fargo and HSBC, and am still spending thousands to keep my farm. When HSBC foreclosed, they used a Note as evidence that I never signed. When we filed my lawsuit against HSBC and Wells Fargo for fraud, I produced the real Note as evidence. I have been showing my original Note to Wells Fargo for over two years to no avail. Now I am being put through the expense of litigation to protect my farm for no valid reason. HSBC, Wells Fargo and Castle, Meinhold & Stawarski have perpetrated a million dollar fraud against me, how many others have to suffer and lose their entire life savings before people "get it"? There are borrowers out there who did nothing but lose their jobs through no fault of their own, and even those who were lucky enough to replace those jobs still needed mortgage help in the form of refinancing or loan modifications. They should have gotten the help, but instead they were fraudulently foreclosed on because these lenders are trying to cover the illegal paperwork they sold to investors as a sham to make millions. Borrowers were the enzyme that fed the poison bacteria of securitized mortgage to investors. What is it going to take for people like randmyan to understand that this was a scam designed to bilk investors of billions of dollars? I paid my loan, I have problems, serious problems with my documents. I challenged the lenders, and lost my farm. Sense of moral obligation? Get real. You just witnessed in 2008-2011 the foreclosure of millions upon millions of homes of regular working people, people who faithfully paid their mortgages on time, every month until they had the rug pulled out from under them. They have every right to fight for their property, as I do, and they have every right to win huge damages and watch these filthy banks go under from the punitive damages and fines. These banks got to big and they need to be punished for what they did and people involved need to go to jail.

March 11 2011 at 5:14 PM Report abuse rate up rate down Reply
1 reply to's comment

that should say 60 percent, I guess the percent part did't work

March 11 2011 at 5:15 PM Report abuse rate up rate down Reply

I can't believe I just wasted 3 mins. of my time reading an article that in the end said the same thing it said in the first sentence.
In essence and with much fewer words, HSBC is still responsible for using robo signing even if it hires another firm that then hires another firm that uses robo signing and those firms act for HSBC's benefit.

What amazes me is that all those people who are paying their loans and are not in default have no problem with their documents it's only those who are in default that are challenging the banks in every way possible so they don't have to give back what they didn't pay for.

And the General Public loves it because they look and say look at those big bad banks. They loaned money and got a security interest in the event I couldn't pay them back and now I can't and they want their security back. Those bad bad banks.
What is wrong with this picture folks? Where is your sense of moral obligation?

March 07 2011 at 7:22 AM Report abuse rate up rate down Reply
1 reply to randmyan's comment

HEy Randy get your **** staight, they stole 79k from me, and my house. Plus they stole 15000 from a friend. if they were an up and up company not running a ponzi scheme, they wouldn't have their asses in court each week. SO STFU

March 22 2011 at 6:35 PM Report abuse rate up rate down Reply

With mortgage rates at all-time lows, now may be a great time to refinance -- if you meet new stringent criteria. Search online for 123 Mortgage Refinance they got me the 3.21% rate even with my not so good credit history.

March 05 2011 at 2:04 AM Report abuse -1 rate up rate down Reply

With all this goings on with HSBC and the home loan problems WHY yes WHY is GM letting HSBC back there GM CREDIT CARD. Yes GM-GMAC do you want more problems than you already have and let the people that are working there way back to BUYING GM autos again give you another BLACK EYE in what i see you don,t need???

March 04 2011 at 7:36 PM Report abuse rate up rate down Reply
1 reply to cindyluvs0000's comment

Why not cindy .... Bank of America did when they took on Countrywide. Oh wait.... look at that mess. What that tells me is ... the banks have no one there that is intelligent enought to pour piss out of a boot with the instructions written on the heel.

March 04 2011 at 8:07 PM Report abuse rate up rate down Reply