(WKBW release) HSBC Bank announced Monday it has entered into a strategic relationship with industry leader PHH Mortgage Corporation to manage HSBC’s mortgage processing and servicing operations.
According to a news release:
Under the terms of the agreement, PHH Mortgage 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. There is no consideration payable or transfer of assets involved but HSBC will pay fees to PHH Mortgage for the services provided in accordance with the agreement. As at March 31, 2012 the unpaid principal balance of the owned prime mortgage loan portfolio and the serviced for others portfolio were US$15.5bn and US$36.6bn, respectively.
The relationship allows HSBC to leverage PHH Mortgage’s mortgage platform capabilities. HSBC will continue to offer mortgages through its branch network, and its in-house loan officer sales force will maintain its focus on originating mortgages for HSBC customers, including Premier clients. Servicing of existing customers1 will not be affected and PHH Mortgage and HSBC are working closely together to ensure seamless service throughout the transition.
The agreement will see approximately 400 HSBC employees given the opportunity to transfer to PHH Mortgage. Further information on the transitional arrangements will be communicated to affected staff and other stakeholders from today.
“I would like to take this opportunity to thank the HSBC mortgage team for the significant contribution they have made over the years,” said Irene Dorner, President and CEO, HSBC USA. “This agreement is a continuation of HSBC's strategy to reposition our U.S. 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.”
The transfer of these operations to PHH Mortgage is expected to complete in the first quarter of 2013.
New York Congresswoman Kathy Hochul released a statement later Monday on the plan. Hochul's statement reads:
“Protecting good jobs in Western New York is among my top priorities. This morning I spoke with the top leadership of HSBC and PHH to ensure both companies maintain a strong presence in Western New York. After hearing from executives, I remain optimistic that both companies will remain an integral part of our local economy by keeping jobs here.”