NY Attorney General Sues HSBC Bank over Foreclosures

June 4, 2013 Updated Jun 4, 2013 at 11:30 PM EDT

By John Borsa

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June 4, 2013 Updated Jun 4, 2013 at 11:30 PM EDT

BUFFALO, NY (WKBW) - When Tracy McClary of Buffalo started to fall behind on her mortgage, she says HSBC Bank gave her the shaft.

"I'm currently working two jobs to try to make these payments which are now double the original amount of my home loan," she said at a news conference on Tuesday attended by New York State Attorney General Eric Schneiderman.

In New York State, banks like HSBC are required to file paperwork with the courts at the start of foreclosure. But Schneiderman said HSBC has failed to do so in thousands of foreclosures.

"We are here because we believe that no one is above the law and that you have to restore public confidence that there's one set of rules for everybody," Schneiderman said.

Banks are required to file a RJI, or Request for Judicial Intervention, which allows for a court-supervised conference between bank and homeowner. Homeowners are allowed to negotiate for a loan modification in an attempt to keep their homes.

A spokesperson for HSBC said, "HSBC is committed to compliance with all applicable laws, which includes those related to foreclosure."

Schneiderman said he will go after other financial institutions who fail to follow the law.

"We hope that other banks will immediately come into compliance. If they do not, we can bring similar actions against them," he said.

Tracy was able to finally negotiate a new loan, but only on a trial basis.

"But I still don't know what's going to happen after the trial payments have ended," she said.