Articles Tagged with ''HSBC''

HSBC Sees Profits At US Lending Business Drop 40 Percent

If you thought the subprime market woes were completely over, you'll probably want to think again -- HSBC Holdings PLC, a UK-based bank that's probably wishing right now it hadn't waded into the US subprime market, said early today that its US unit earned $541 million, down significantly from $888 million in the year-ago period. The decline was driven by a big increase in mortgage arrears as rising interest rates and weaker property prices piled pressure on HSBC Finance's customers.
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Top Subprime Originators

Reuters is reporting on Inside Mortgage Finance's list of top subprime mortgage originators. Here's the top five: 1. HSBC / $52.8B 2. New Century / $51.6 3. Countrywide / $40.6 4. Citi / $38.8B 5. Ameriquest / $29.5
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Commentary: Mortgage Job Losses Mounting

Editor's note: After publishing this commentary, I've since been contacted by a spokesperson at Fifth Third Bancorp., who said it would be inaccurate to characterize the move at Home Equity of America as "exiting the business," as I did in my commentary below. The spokesperson noted that the company "will no longer be able to provide products and services to some of its brokers," and said that the memoradum refers only to the company's decision to eliminate it's outside sales function. The spokesperson further clarified that an inside sales team at Fifth Third Bank's Residential Wholesale Mortgage group will continue to originate loans through the HEA brand. Lastly, the company representive said I didn't cite an additional memo sent to brokers that discussed expanded offerings through Fifth Third. None of this information was contained (or even implied) in the original memo I cited as the source of my speculation, so I think I can be reasonably forgiven for taking statements such as "Home Equity of America is no longer able to provide you with products and services" to be synonymous with an exit. Prime lenders start feeling heat: We're now starting to see prime lenders exit due to market conditions. (Yes, you read that correctly: prime lenders). Case in point: Home Equity of America, a mortage lender specializing in prime seconds and operating in 23 states, sent a letter to its brokers this week notifying them that it will exit the business some of them that it would no longer fund their loans. HEA is a subsidiary of Cincinnati-based Fifth Third Bank.
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HSBC Layoffs

The Bradenton Herald was the first to report that HSBC will be closing its Orlando collections call center, costing the area roughly 110 jobs.
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Commentary: HSBC Subprime Plans, NAR Confusion

HSBC rumors: Numerous rumors have surfaced in the past few weeks that HSBC is considering a full-scale exit from subprime lending. Its Decision One origination arm is the European bank's U.S.-based wholesale subprime lender, and has been the focus of intense scrutiny recently -- even before HSBC announced late this past week it will be exiting the correspondent lending channel at the end of May. No word from HSBC sources on its plans for Decision One, which has also been rumored to be up for sale, but the company did blame its correspondent lenders for the lion's share of more than $10 billion in loan impairment charges during 2006 at a Senate hearing this past week, saying that loans originated by "third parties" but on the company's books drove larger-than-expected losses.
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HSBC To to Exit Correspondent Lending

In a notice sent to to brokers yesterday and obtained by Housing Wire, HSBC said yesterday that it "has made the decision to discontinue correspondent channel acquisitions" through its HSBC Mortgage Services division. The division was primarily engaged in correspondent subprime lending, and the company said in its notice that it will cease correspondent activities on May 31, 2007.
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Commentary: Subprime Hits a Wall

Merrill Lynch gets cold feet: Unless you've been living under a rock, by far the biggest news of the week came in the form of an acknowledgement from the nation's third-largest originator, New Century Financial Corporation, that it had not only failed to properly account for the impact of loan repurchases on its financial statements throughout 2006, but had also grossly misestimated the volume of repurchases it would be faced with. It's pretty clear at this point that at least one investment firm is tightening the screws on subprime credit. That firm? Merrill Lynch, recently stung by bankruptcies at both Ownit and MLN USA, who were both funded through agreements with the Wall Street giant. Competing industry publication National Mortgage News first broke the story on Merrill's recent margin calls, and although Merrill did not provide New Century with a large warehouse line, it's clear that loan buybacks are becoming a growing problem for any subprime lender regardless of which Wall Street operation is providing the funding.
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