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HSBC to close mortgage unit

September 22, 2007|From Times Staff and Wire Reports

HSBC Holdings, Europe's biggest bank, said Friday that it would close Decision One Mortgage, a U.S. unit that made sub-prime loans through independent brokers, cutting 750 jobs and taking $945 million in charges and write-downs.

HSBC had sold the brokered sub-prime loans in the secondary markets but was no longer able to do so because investor demand has evaporated, said Thomas Detelich, group executive for HSBC North America Holdings Inc.

The company will continue to write sub-prime mortgages through its 1,350-office HFC and Beneficial finance companies, which provide a variety of loans directly to consumers, Detelich said. The bank keeps those mortgages as investments rather than selling them.

The closure of Decision One will eliminate jobs at offices in Fort Mill, S.C.; Charlotte, N.C.; and Phoenix, HSBC said.

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