HSBC Tightening Mortgage Practices

Chicago Tribune (06/02/08); Yerak, Becky
HSBC Finance in Mettawa, Ill., is taking a more conservative approach to subprime mortgage lending due to fears that losses will continue to mount on mortgage lending in the United States, according to Brendan McDonagh--CEO of HSBC North America Holdings, which oversees the consumer lending business. Global profits for the first quarter of 2008 are up from a year ago for London-based parent HSBC Holdings; but it had to take a $3.2 billion write-down on U.S. subprime mortgages, a market it entered in 2003. HSBC Finance had 9,627 foreclosed properties at the end of 2007, up from 8,809 at the end of the third quarter. The company has modified or restructured about 22 percent of its mortgage book, or about $18 billion, and is also tightening credit scores and debt-to-income requirements.