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
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 firstname.lastname@example.org for further information or to share your story.