HSBC Bank USA has hired a company to run its mortgage servicing business. About 200 employees at its Depew mortgage office could lose their jobs.
Here are statments from the companies:
HSBC Bank USA, N.A. To Transfer Retail Mortgage Processing and Servicing Operations
*HSBC to continue providing mortgages through its U.S. branch network*
*PHH Mortgage engaged to service HSBC’s prime mortgage portfolio*
*Many HSBC mortgage employees to transfer to PHH Mortgage*
New York, NY (May 7, 2012) - HSBC Bank USA, N.A.(HSBC), a wholly-owned subsidiary of HSBC Holdings plc, has entered into a strategic relationship with industry leader PHH Mortgage Corporation (‘PHH Mortgage’), a subsidiary of PHH Corporation, to manage HSBC’s mortgage processing and servicing operations.
Under the terms of the agreement, PHH Mortgage will provide HSBC with mortgage originations processing services as well as sub-servicing of the bank's prime mortgage loan portfolio and serviced for others portfolio. There is no consideration payable or transfer of assets involved but HSBC will pay fees to PHH Mortgage for the services provided in accordance with the agreement. As at March 31, 2012 the unpaid principal balance of the owned prime mortgage loan portfolio and the serviced for others portfolio were US$15.5bn and US$36.6bn, respectively.
The relationship allows HSBC to leverage PHH Mortgage’s mortgage platform capabilities. HSBC will continue to offer mortgages through its branch network, and its in-house loan officer sales force will maintain its focus on originating mortgages for HSBC customers, including Premier clients. Servicing of existing customers1 will not be affected and PHH Mortgage and HSBC are working closely together to ensure seamless service throughout the transition.
The agreement will see approximately 400 HSBC employees given the opportunity to transfer to PHH Mortgage. Further information on the transitional arrangements will be communicated to affected staff and other stakeholders from today.
“I would like to take this opportunity to thank the HSBC mortgage team for the significant contribution they have made over the years,” said Irene Dorner, President and CEO, HSBC USA. “This agreement is a continuation of HSBC's strategy to reposition our U.S. business and ensures we manage our mortgage activities most efficiently. We look forward to this new relationship with PHH Mortgage and the outstanding support they will provide.”
The transfer of these operations to PHH Mortgage is expected to complete in the first quarter of 2013.
PHH Mortgage to Provide Private Label Mortgage Services to HSBC Bank USA;
Relationship to Include Subservicing of $52 Billion of Mortgage Loans
Mt. Laurel, NJ (May 7, 2012) – PHH Mortgage Corporation (“PHH Mortgage”), a subsidiary of PHH Corporation (NYSE: PHH) (the “Company”), today announced it has entered into a strategic relationship to provide private label end-to-end mortgage origination services and loan servicing to HSBC Bank USA, N.A. (“HSBC”).
Under the terms of the agreements, PHH Mortgage will provide HSBC with mortgage origination processing services, as well as subservicing of HSBC's $15.5 billion prime mortgage loan portfolio and $36.6 billion of loans serviced for third-party investors (both as of March 31, 2012). It is expected that approximately 400 employees from HSBC’s mortgage facility in Depew, New York, will transfer to PHH Mortgage, which plans to maintain operations in the area.
The agreement is effective immediately, and the conversion of operations is expected to be complete in the first quarter of 2013.
“We are excited to partner with a global financial brand like HSBC,” said Smriti Popenoe, Interim President of PHH Mortgage, “and we are pleased to welcome many HSBC employees to the PHH Mortgage team. This is an outstanding example of the commitment of our Private Label Services business to serving the nation’s leading financial institutions, regional banks, community banks and credit unions, and we look forward to a long-term, strategic relationship.”
“We’re thrilled and honored to welcome HSBC into our family of private label partnerships,” said Glen A. Messina, President and CEO of PHH Corporation, “and we thank them for their confidence in us. We are committed to delivering an exceptional mortgage experience to HSBC customers through our focus on operational excellence and customer service. This partnership demonstrates the strength of our franchise and our commitment to growing our private label mortgage platform.”
About PHH Mortgage
PHH Mortgage Corporation, a subsidiary of PHH Corporation (NYSE:PHH), provides cost-effective mortgage solutions for financial institutions, real estate brokers, and government agencies. PHH Mortgage provides full-service capabilities for originating, processing, closing and servicing mortgage loans, and is one of the top five originators of retail residential mortgages and one of the top 10 mortgage servicers in the United States1. For more information, visit www.phhmortgagesolutions.com.
1 Inside Mortgage Finance, Copyright 2012
About PHH Corporation
Headquartered in Mount Laurel, New Jersey, PHH Corporation (NYSE: PHH) is a leading provider of business process management services for the mortgage and fleet industries. Its subsidiary, PHH Mortgage, is one of the top five retail originators of residential mortgages in the United States1, and its subsidiary, PHH Arval, is a leading fleet management services provider in the United States and Canada. PHH has more than 5,000 employees dedicated to delivering premier customer service and providing value-added solutions to its clients. For additional information about PHH and its subsidiaries, please visit the Company’s website at www.phh.com.
1 Inside Mortgage Finance, Copyright 2012
HSBC Bank USA, N.A
HSBC Bank USA, National Association, with total assets of $210.3 billion as of 31 December 2011 (U.S. GAAP), serves around four million customers through its personal financial services, commercial banking, private banking, asset management, and global banking and markets segments. It currently operates more than 470 bank branches throughout the United States. There are over 370 in New York state as well as branches in Connecticut, Washington, D.C., Florida, New Jersey, Pennsylvania, Maryland, Virginia, California, Delaware, Illinois, Oregon and Washington State. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirect, wholly-owned subsidiary of HSBC North America Holdings Inc., one of the nation's largest bank holding companies by assets. HSBC Bank USA, N.A. is a member of the FDIC.