The Number of Homes Owned and Repossessed by HSBC are Falling

The regulatory papers that are filed by the consumer-lending unit states that the number of homes that the HSBC Bank owns and repossesses has fallen considerably. Within the previous quarter of July-September this year, the number of properties being foreclosed by the HSBC bank fell by 6,266 properties. This is at least 12% less than the figures of April-June quarter, which were 7,105 properties. In fact, the figures of 3,448 in the July-September quarter were also less than the last year’s figures during the same time span when the number of properties was 3,463.

The huge number of 6,000 foreclosed properties featured in the HSBC books during the months of July-September has tended to remain quite high. However, compared to last year’s figure of10,887 repossessed properties including 5,416 fresh foreclosures, this year’s figures of the same time are less by 43%. According to the reports of the third quarter, it was clear that the selling of the foreclosed properties was faster as compared to the previous quarters when properties were sold at an average of 184 days. In fact, during the first quarter the average number of days for selling the foreclosed properties was 201.

According to Robert Law, the Nomura banking analyst, the swifter selling away of the repossessed properties supports the banks to transform their properties into cash. Within this quarter, the HSBC bank had an average loss of 8.4% while selling the homes that are owned and repossessed by the bank. This figure was quite less than the average of 13% reached in the April-June quarter. Moreover, compared to the first quarter, the loss was at an average of 17%. The prices of homes became stable according to HSBC during the July-September quarter. This enabled the bank to auction off its foreclosed properties at a higher price.

According to HSBC, among the reasons of a fall in the number of reclaimed homes was it attempts to fulfill the federal directives regarding modification of loans and prevention of foreclosures. Within this year, HSBC has modified at least 95,000 mortgage accounts that were problematic in nature. This figure showed a considerable increase from the 92,500 modified mortgages last year.

HSBC enrolled in the subprime market in the country according to the records, as it obtained the status of the mortgage or credit lender for Household International in the year 2003. Following this, it accumulated numerous risky loans for homes. Until now, HSBC has posted charges worth $67 billion, thanks to the bad home loans it has within the country.

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