HSBC to Halt Lending, Shutter HFC and Beneficial

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HSBC announced today it will close both its HFC and Beneficial units, resulting in thousands of layoffs.

The consumer lending companies offer a number of products, including home mortgages, home equity loans, and personal loans.  Combined, the two units have 775 branches in 45 states.

“HSBC will continue to service and collect the existing receivable portfolio as it runs off, while continuing efforts to reach out and assist mortgage customers with their loan repayments and home preservation,” the company said in a press release.

“The Consumer Lending branch offices, branded in the US as HFC and Beneficial, will cease taking new loan applications as soon as practical and substantially all branch offices will be closed as soon as commitments to customers are satisfied. “

The company said it remains committed to the “US financial services market” and its remaining U.S. based business units, such as its credit card subsidiary.

In late November, HSBC halted wholesale and correspondent lending thanks to ongoing disruptions in the credit markets.

At the time, the bank said it serviced over 400,000 first mortgages valued at over $68.8 billion, and more than 120,000 home equity lines with value in excess of $3.5 billion.

HSBC has also shut down most of its structured credit and mortgage-backed securities distribution operations.

The company reported a 2008 pretax loss of $15.5 billion in its U.S. operations today, compared with profit of $91 million in 2007.

Closed Offices Was Just the Beginning

Back in 2007, Beneficial Finance, the non-prime retail mortgage unit of HSBC bank, closed roughly 300 offices nationwide, resulting in the loss of 1,500 jobs.

HSBC also made plans to consolidate 260 consumer lending branches as a result of weak demand and the ongoing credit crunch.

At the time, I heard that California and New Jersey were hit especially hard by the closures, with both set to lose about half of their total branches.

Numerous other locations throughout the nation were consolidated or closed in markets that experienced rapid home price depreciation.

The move followed similar mortgage-related pullbacks, including the closure of HSBC’s wholesale lending unit Decision One, the closure of a Carmel, Indiana mortgage office which resulted in 600 layoffs, and the recent halt to the trade of mortgage-backed securities.

Per their website, Beneficial Finance was a mortgage lender that offered home equity loans, home purchase loans, refinance loans, and debt consolidation loans.

It plans to raise $17.7 billion in new capital via a share repurchase program and cut 6,100 jobs.

Check out the latest list of closed home loan lenders, mortgage layoffs and mergers.

10 thoughts on “HSBC to Halt Lending, Shutter HFC and Beneficial”

  1. This is amazing….or maybe not. The amazing part is that this is the same HSBC that holds my 1st and 2nd mortgage. I am working 2 jobs to try and avoid foreclosure on this property, yet here they are laundering money from drug cartels. I have applied 4 times for loan modifications and have been turned down every time. I guess I am not in the right country or have the right connections. Its just makes you sick sometimes.

  2. I have also been denied a modification on my home of 30+ years. They have worked somewhat with me I also have a !st and 2nd my husband passed away 6 years ago up until 3 years ago I was never late I had no idea this was not a US lender.

  3. It’s bad enuff that they are scumbags for laundering money for drug lords…now I can’t use my equity line of credit. They didn’t even have the balls to tell their current customers about this. They are maggots!!!!!!!!

  4. Is there an address for the parent company, having control over what once was “Beneficial Finance Co.”, I have a problem dating back to 2001 that I need to try to resolve.

  5. Don Moats, I looking for the same information dating back to 2009 with Beneficial Mortgage Co. of Virginia. My stepfather passed away but a had a Credit Life insurance policy with Household with Beneficial as the Creditor (first beneficiary). Contact me.

  6. Hopefully this reaches someone who can help me.

    I obtained a equity loan from HFC Beneficial / Beneficial Mortgage Co. of Virginia on 10/08/2004 as recorded in the deed book 04-33780

    The loan was absorbed by SPS and Beneficial never recorded and or sent any documentation regarding the transfer.

    I’m selling the home and can’t because of this. Is there anyway to contact a Beneficial parent company to clear the matter?

  7. I am in the same boat as many others. Beneficial never released my second mortgage lien. Has anyone been successful contacting them?

  8. I’ve tried to contact someone at Beneficial Finance since 2018. Would someone please contact me by phone, this problem is URGENT! Thanks!

  9. Same same here beneficial sold our mortgage to Greentree I wrote them and ask them for information we had a work out program and we were making payments Greentree had no record of all of our payments. In the date book it says beneficial is the holder of the mortgage they never released the lien because they sold it. The problem lays in the fact that the money was never credited to our account when they switched owners.They hold no information they just buy the debt. I was told by green tech to contact household finance for any of my problems which number it doesn’t exist. I wrote another letter to Greentree stating that I wanted all the information on my loan and amortization and my payments they sent me a list of five payments over the loan that started in 2005. Hi I’m going to have to foreclose on my house because I cannot get the lien released because now after ditech closed it is with spring leaf mortgage company. And they say my last payment was in 2011 yet Greentree originally said my last payment was in 2006 so there’s so many discrepancies. And my bank does not have that information I change bank account

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