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Decision One Layoffs

I’m hearing that Decision One, the non-conforming wholesale mortgage arm of HSBC, has possibly laid off a few hundred employees.

A source “confirmed” the layoffs, informing me that the Phoenix sales center had been eliminated, and that several sales managers were demoted to AEs.

He also mentioned that Decision One had planned to get access to Alt-A product, but that’s apparently now on hold, though the current “Core” product line is set to be eliminated by the end of this month.

Supposedly Decision One has not wanted to close loans because it’s more expensive to fund them and attempt to sell them on the secondary mortgage market than it is to originate nothing.

My source did say that they’re keeping some of their sales force intact so if and when the market turns they’ll be ready immediately.

Not sure if that points to a total halt in production, but it’s definitely discouraging news.

I’m hoping to get more detailed information on the layoffs as soon as possible, but my source told me about 150 employees have been retained.

My source added the following regarding production:

“The top 100 AE’s from last year were put on some sort of guarantee to keep them around.”

“From what I understand, if they closed $1 (or $1.75) million dollars, they were guaranteed 100% of last years pay. If they did not, they were guaranteed 60% of last years pay.”

“The rest of the employees apparently have to close 2 (incredibly low number) loans and they are guaranteed $4,000 plus their base salary. From what I hear many of them are not even hitting those numbers.”

Another source mentioned layoffs on the East Coast, but I don’t have any solid details as of yet.

I did some digging around the Decision One website in the meantime, and according to the latest product matrix pulled from the Decision One website, the mortgage lender still allows credit scores as low as 520 (subprime), previous mortgage lates, recent foreclosure, loan amounts up to $1 million, and other seemingly high-risk loans.

If anything, the current product mix is a sign that all is not well at Decision One.

Earlier this year, parent-company HSBC discontinued its correspondent lending business, and rumors have circulated previously that Decision One was up for sale.

Additionally, last month HSBC closed a mortgage office in Carmel, Indiana, resulting in roughly 600 layoffs.

Decision One has four regional sales centers, located in Modesto, CA, Phoenix, AZ, Chicago, IL, and a main hub in Charlotte, NC.

The company has been around since 1996, and was later bought out in 1999 by Household Finance who were acquired by HSBC in March 2003.

See the latest mortgage layoffs and closed lenders.

Update: A source close to the company has informed me that the lender has shuttered operations. A related conference call and announcement are expected tomorrow, Sep. 21.

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