PHH to Lose HSBC Subservicing Portfolio Following Sale

PHH Corp. will lose nearly a third of its subservicing portfolio as HSBC Bank agreed to sell the mortgage servicing rights on 139,000 loans.

PHH said in a regulatory filing Thursday that HSBC notified it on Aug. 19 of the sale. The Mount Laurel, N.J.-based mortgage company explained that the buyer of the mortgage servicing rights does not plan to retain PHH as a subservicer.

PHH said that it expects to transfer the subservicing responsibilities to the purchaser or the purchaser's designee in the fourth quarter of 2016.

The loans involved represent 29% of the company's subservicing volume, PHH said in the filing. Previously, PHH announced that Merrill Lynch signaled it would insource the subservicing portfolio it had with PHH. Merrill Lynch has also said it will take some of its origination business from PHH in-house.

Altogether, the two situations will represent a reduction in 229,000 loans, or 47% of subservicing volume, for PHH

The subservicing for HSBC was supported by a PHH facility near Buffalo, N.Y., company spokesman Dico Akseraylian said. The HSBC transaction is expected to affect some of the facility's 300 employees, though Akseraylian said a specific number had not yet been determined.

"The HSBC transaction is going to impact some of our folks up there," Akseraylian said. "Once we have the specifics we'll file the [Worker Adjustment and Retraining Notification] notice at that time."

Akseraylian added that some of the origination functions performed by the Buffalo facility would be relocated to the company's site in Jacksonville, Fla., which supported PHH's business with Merrill Lynch.