HSBC Shuts Down Wholesale Subprime Mortgage Division, Decision One Mortgage
NEW YORK (Associated Press) - HSBC Finance Corp., a unit of HSBC Holdings Plc., said Friday it will close its wholesale mortgage lender Decision One Mortgage.
Decision One originates subprime mortgages through brokers. Subprime mortgages are loans given to customers with poor credit. Banks and investors have shied away from originating and purchasing subprime mortgages because of rising delinquencies and defaults among the risky loans.
HSBC will continue to originate mortgages through its consumer lending branch network under its HFC and Beneficial brands.
About 750 employees will be affected by the closing.
HSBC will record a non-cash charge of about $880 million for goodwill impairment and a $65 million charge for restructuring costs, which include severance and facility closure costs.
