It’s been a while since my last conversation with Carrick Mollenkamp of the Wall Street Journal. We were busy watching HSBC Finance for evidence of the old Household International. Carrick wrote an article on November 18, detailing subprime’s effect on HSBC Finance. It is interesting to discover that HSBC is still re-aging loans. While the practice once resulted in a cease and desist order from the SEC, apparently it is legal as long as the practice is disclosed and the amount of such loans is accurately and correctly disclosed. Re-aging, or putting more debt on the back end of the loan and pretending that the loan is current is no way to solve a problem.
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Thomas Hartley of Business First of Buffalo reported that HSBC USA has no plans to take part in the federal government troubled asset relief program (TARP). The article “HSBC Passes On Federal Program” says “HSBC supports the U.S. government’s efforts as part of ongoing public and private initiatives to address issues in the marketplace, including the recent announcement of the TARP (troubled asset relief program) Capital Purchase Program.” Other than lip service we wonder what kind of support HSBC gives. Other articles point at failures in HOPE NOW, another program that HSBC “supports”. We think HSBC will avoid any program or initiative that might give others a look at their books.
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Did you think HSBC Finance was gone, or exited the subprime market? HSBC has been quiet, but HSBC Finance is not gone. They are called HSBC Consumer Lending and they are still in Prospect Heights Illinois. As for subprime, according to National Mortgage News, in the second quarter of 2008 HSBC Consumer Lending was the largest — #1 — subprime lender in the United States. Here are the names and positions:
Category: Subprime
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