Household HSBC Watch

Even bankrupt lenders are looking for a new approach to lending. One subprime lender, the bankrupt Delta Financial, is reemerging as a lender of FHA mortgages and other “alternative” products. The company’s former chief executive, Hugh Miller, along with a small group of former Delta executives, is launching Reliance First Capital, a mortgage company that will focus on FHA loans. What will HSBC do with HSBC Finance? The options are endless, beginning with actually offering real FHA prime mortgages, to selling HSBC Finance. Should HSBC Plc sell HSBC USA entirely, including holding companies like HSBC Finance?

As defunct and bankrupt companies start to re-emerge as FHA insured honest mortgage companies, what is the incentive for HSBC Finance as they continue to service a market that has problems during stagflation and the credit crunch? For instance, another New York subprime lender - Topdot Mortgage - switched from subprime to FHA mortgages last year, mainly because investors stopped buying subprime loans on the secondary market when defaults skyrocketed in late 2007. HSBC USA is buying and financing HSBC Finance. Perhaps a new slogan is needed at HSBC Plc and HSBC USA. We suggest ‘If Topdot can do it certainly HSBC can too’.

The bottom line is this - If companies named ‘Topdot’ are switching to FHA mortgages to stay alive HSBC certainly must consider how to change HSBC Finance (formerly Household International) so they to can stay alive. Failing to do so will put HSBC USA and their investors at risk. Will HSBC Plc abandon the United States entirely if they can do so for a good price? HSBC Finance is basically worthless, and receivables are the property of HSBC USA. There is $10 to $20 billion (USD) in the mix somewhere, while Knight Vinke and others want to know where, why, and how much.

Clearly HSBC USA cannot continue to prop up an outdated risky business model that has outlived its time. Websites like ours continue to show the consumer side of predatory lending. Websites like ours continue to publish customer problems and complaints. Today we published as narrative from somebody who was denied a short sale by HSBC, that clearly showed how HSBC USA and HSBC Finance play loose and free with London’s money and the HSBC name. HSBC news releases tell of how they help customers, and are members of various subprime aid programs. Reports from real customers, published on our websites, show different truths.

Some employees send insider experiences about working at HSBC, while other employees tell customers to take responsibility, get an education, lay off the alcohol, grow up, or quit whining. What disturbs our Attorney General is deceit, ommission of facts until after contract signing, and manipulation of payments. In time we shall see what London decides to do.