MOSCOW, June 5 (RAPSI) - New York Attorney General's Office is suing HSBC Holdings Plc for allegedly breaking the New York foreclosure law, Bloomberg reports on Wednesday, citing Attorney General Eric Schneiderman.

The company has reportedly failed to meet requirements for giving homeowners the opportunity to negotiate loan modifications, Schneiderman's office said.

"Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can't even get the legally required settlement conference that could help them keep their homes," the attorney general said in a statement.

The New York law on foreclosures stipulates that homeowners are entitled to court-supervised settlement conferences in which they can try to negotiate alternatives to foreclosure, such as a loan modification that lowers their monthly payments. According to the authorities, HSBC has failed to give its clients this opportunity.

According to set procedure, the bank should send the foreclosure documents to the borrower, and a settlement conference should be held within 60 days of that date.

Schneiderman's office found that HSBC failed to file the required paperwork in hundreds of foreclosure cases, putting off the filing of the document for more than two years. At the same time HSBC continued to charge interest and fees. These charges reduce the likelihood of someone qualifying for a loan modification because their credit record will be negatively affected.

"The attorney general will seek to recover restitution and damages for homeowners and force HSBC to file the required papers in pending foreclosure actions and future cases," Bloomberg reports.