HSBC's US subsidiary will see PHH Mortgage Corporation manage its mortgage-processing and servicing operations as part of a new strategic relationship.
PHH Mortgage, the subsidiary of PHH Corporation, 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. No consideration is payable as pat of the agreement but HSBC will pay fees for the services.
At the end of March, the unpaid principal balances of the owned prime mortgage loan portfolio and the serviced for others portfolio were$15.5bn and $36.6bn, respectively.
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HSBC will continue to offer mortgages through its branch network, the group said.
"This agreement is a continuation of HSBC's strategy to reposition our US 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," said HSBC USA's President and Chief Executive Officer Irene Dorner.
The agreement will give 400 HSBC employees the "opportunity" to transfer to PHH Mortgage.
The transfer of the operations is expected to complete in the first quarter of 2013.
BC
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