Things looked grim for HSBC Bank USA N.A. last year when it faced involuntary dismissal of its case after a bench trial and sanctions for prosecuting a foreclosure suit with “unclean hands.”

Back then, the trial judge sided with borrowers accusing the bank of building its case on a forged mortgage assignment and granted their request to force the financial institution to show why it shouldn’t be punished for committing a fraud on the court.