Many lenders went out of business or declared bankruptcy, but major losses and write-downs from subprime continue. Lawsuits are beginning, as Ohio’s Attorney General tries to show that Freddie Mac duped investors by not revealing how risky the subprime market was. The risk to other lenders is high if a precedent is set. HSBC’s purchase of Household International may put HSBC at greater risk than other lenders. Here is why:
Employees and former employees are speaking out and revealing insider secrets
Complaints are being substantiated and verified
Short sales are calling attention to quality and risk of loans
Foreclosures and related data must be reported
Commonality between the U.K. and U.S. is revealing for investigators
Household International was charged with predatory lending before HSBC could buy the company. History since the time of purchase - 2003 - shows little has changed within what is now called HSBC Finance Corporation. To assist in coordination and to expedite the ability to see the national picture, Household HSBC Watch sent a year-end report to the National Association of Attorney’s General. Employees and former employees have come forth with reports that substantiate key facts in our year-end report.
For those who think it is right to put pension funds at risk in order to loan a minimum wage worker and his minimum wage-earning wife enough to buy a $400,000 house perhaps this issue is not a problem. Pension fund managers, attorneys, insurers and others think it is a big problem. Just like a gambler who loses the rent money subprime lenders bear considerable watching. Some, however, already have track records where past precedent and today’s consumer sentiment might work against them.
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