HSBC - HFC & Beneficial - Agency, Non-Conforming, Subprime
HSBC told media sources today that they would be closing their U.S. consumer loan operations and cutting 6,100 jobs. As reported by CNN Money, the move coincides with parent HSBC Holding's launch of "Britain's biggest rights issue" as it tries to raise 12.5 billion pounds (US $18 billion) to "overcome big losses."
NYTimes quipped that HSBC had "finally draw a line under its troubled subprime mortgage lender."
"HSBC's bad loan charges amounted to about $53 billion over the last three years, most of that stems from the United States unit. The bank wrote off $10 billion for the entire value of the American business but the unit still has a mortgage portfolio of $62 billion."
Shares in HBC fell sharply on the news. From TimesOnline:
According to their web site, HFC had 300 of those branches in 36 states. Beneficial's site boasts "more than 475 offices in 45 states." We contacted an HFC branch which confirmed they had learned of the news this morning and were no longer accepting loan applications effective immediately.
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BobbaLouie at 16:19 2009-03-02 said:This implosion is huge. The last of the subprime companies. Permalink
Maximonious at 01:14 2009-03-03 said:HFC and Beneficial were scum of the baby pool... they wrote bad loans, expensive loans, they were truly the predators of our time. Permalink
candleinthewind at 16:56 2009-03-03 said:I couldn't agree more with Maximoniuos! Both HFC and Beneficial are pure evil and it's about time thier satanic ways caught up with them!!! I can't count how many cash out loans I was able to get approved and then one of these two slime bag companies would come behind me and tell borrowers that they qualified for much more cash out...even to the affect of over 100% of the appraised value. I can almost guarentee that most if not all unsuspecting borrowers fell into the tar pit of lies they spewed out and are now in foreclosure. I'm looking forward to this class action lawsuit!!! Permalink
mahalo guy at 02:23 2009-03-07 said:Interesting post Jack, Even though I was originating mortgages in the early eighty's, Household didn't come on my radar screen until 1990 or so. I had no idea they were that old and were legitimate in the past. It's nice to learn something new.
What a lot of people forget is that from 1980 back to the late 1880's the only source of finance for individual people was HFC and companies like HFC. HFC was considered to be a top notch company and employer and employees where proud to work there. It was there that my parents got financing for their first washer/dryer and that my grandparents got a car financed. It was there that I got my training in consumer lending and went on to run departments in various banks. Remember, banks rarely lent money to the average citizen without hardcore collateral and getting cash from a charge card was virtually unheard of. The max limits you had on charge cards was maybe $1000 if you where lucky and walked on water. It wasnt until the mid 80's that HFC sunk to predatory lending. Thats when banks woke up and turned on consumer lending. While I'm glad HFC in its current configeration is gone, I'm still sadened that the company came to such a sorry ending.Permalink
NYMortgageBroker at 08:55 2009-03-09 said:HSBC moved in next door in 2000 .. and allowed their main contractor to use unlicenced subcontractors for plumbing and phone installation, and other aspects of their buildout. They set off burst pipes and sprinklers for hours in the office & stores next door and left me unnotified over a warm three day holiday weekend. The result - three feet of water in height in our office as perlines on the wall... Moreover HSBC had NO permission to begin construction as there were no work order permits posted by our township.... Our landlord sent out someone who determined three feet of water had fallen during their ignoring of the problem. The poor unlicenced guy that ultimately had the job came over offering to give me part of his fee. I declined of course. HSBC then a month later "accidently" ripped out our phone terminals.. while installing their own on the adjacent wall. They did this during the Verizon strike in 2000. Our phones were off for over a month during full page ads being ran. They stonewalled any damage claims, including photos of everything in our office ruined.. all files drenched with ink smeared, all computers & printers on fritz or not operational.. red lights on or not powering on.. until they were sued. The attorney for the building itself insisted on representing /defending us... and got us partly reimbursed. That was a horrific experience of gross negligence. HSBC was growing so fast they didn't care who they hurt in the process... what local laws they violated, and they had a rude branch manager that was snyde when she saw us as neighbors who she knew they damaged the equipment of. HSBC was another titan of a company that was too big to be a considerate part of society. Large companies are like massive behemoths slothing through and knocking down anything in their path. That is why capitalism is supposed to let them go. And let small savings banks grow.. and other careful companies shine through. It won't happen if Washington keeps propping / rigging them up. There 's a reason big companies fail.. they are too big and clumsey to be efficient. Permalink
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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.