HSBC to close non-prime wholesale mortgage lender

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BDD7B2CCF%2DE327%2D4B58%2DB140%2DD690FA45C62 ^ | 9-21-07

[Hydroshock]

LONDON (MarketWatch) -- HSBC Holdings (HBC:HSBC Hldgs Plc News, chart, profile, more Last: 92.55+0.90+0.98%

11:08am 09/21/2007

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: HBC92.55, +0.90, +1.0%) (UK:HSBA:hsbc hldgs ord usd0.50(uk reg) News, chart, profile, more Last: 911.50+2.50+0.28%

4:13pm 09/21/2007

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: UK:HSBA911.50, +2.50, +0.3%) said Friday it plans to close its non-prime wholesale mortgage lending arm, Decision One Mortgage, which will result in 750 job losses. HSBC said it will focus on originating and servicing loans through its consumer lending branch network under the HFC and Beneficial brands. "It's no longer sustainable and not the right place to allocate capital in the future," said CEO Michael Geoghegan. It said its HSBC Finance arm will take a $880 million goodwill impairment as well as $65 million in restructuring costs, but the goodwill impairment won't be recognized by HSBC Holdings.

[Eagles Talon IV]

Makes sense since there is no sub prime lending going on anyway. This is a lesson to all those who don’t get the importance of maintaining a strong credit back round.

[Hydroshock]

I would not have my job if I did not have good credit. A credit chaeck is part of the background on it.

[upchuck]

Makes sense since there is no sub prime lending going on anyway.

Doubt it. I see ads all over the Internet offering loans to folks that cannot document their income. And loans offering outrageous rates like 3%.

[Eagles Talon IV]

Really? Are these for sub prime borrowers or just low rate loans aimed at credit worthy borrowers? Loans to those with acceptable credit have not been effected. ARM’s and no doc loans to high credit score individuals are and will continue. After all it is only by lending money that these financial institutions can survive.

[upchuck]

“Really? Are these for sub prime borrowers or just low rate loans aimed at credit worthy borrowers?”

I don’t know and won’t waste my time investigating. I just reported what I see. I’d guess that if you can’t document your income that you’d be sub prime.