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HSBC writes off $11 billion in mortgages, but borrowers are the big losers

What do you get when you cross the trillion-dollar home mortgage market with the loosest credit standards this side of Las Vegas? How about $11 billion in write-offs by one bank alone? And that’s just the beginning. Household Savings (HSBC) began unloading billions in non-performing home mortgages – a move that reflects the growing uptick in bankruptcies and will surely be copied by other banks as the oversold mortgage market winds down and collapses in pockets.

Coincidentally, the loans being written off are the very same ones pushed on the public just recently by an army of brokers working for, you guessed it, HSBC and others like it. Not that this is really anything new. One industry observer ponted out recently that HSBC faced escalating losses from thousands of low-income families unable to repay their loans and defaulting on both their first and second mortgages. HSBC admitted it had seriously underestimated the number of defaults — including loans obtained just 6 months before a default.

The loans now being unloaded and shunned by HSBC include features once loved by the home mortgage industry
100% – 125% financing

nose-bleed interest rates

inflated home values based on future growth that never panned out

prepayment penalties

loads of points (fees) and junk fees for brokers

lies by investors claiming to “live in” their 3rd investment property
If any of this sounds familiar, it should. We deal with these kinds of situations all the time for Clients at every level of society. These predatory loans are as likely to be held by professionals as they are by members of the working class. E-mail us at mmhedayat@hotmail.com for further information or to share your story.

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  • SC Bankruptcy & Consumer Law Blog » » HSCBC Write-off of $11B in Mortgages

    […] the bankruptcy blog of Mazy Hedayat, comes this link for the story of how Household Savings, a credit card and home loan issuer, is writing off billions […]

  • Carrie

    Do a bulk analysis of these loans to determine what the collateral (the house) is worth. cevans@fncinc.com