Further proof that the John Bond – William Aldinger Household International deal of almost five years ago was a stinker is about to slap HSBC hard. Left to there own predatory devices Household International would have gone bankrupt in 2003. As proof of how bad Household International was, it took most other subprime lenders until 2007 to go bankrupt. But HSBC rescued Household International. Look for sharehold lawsuits against HSBC in 2007 – 2008, as legal experts prove HSBC did not perform due diligence prior to the purchase.
A $9 billion wave of risky mortgages resetting at higher interest rates in the United States could force Europe’s biggest bank, HSBC Holdings Plc, to absorb another big hit to profits as more customers default. Most of HSBC’s reset activity, which increases the chances of defaults by triggering sharply higher monthly mortgage payments, will take place in the second half of the year. The London-based bank’s HSBC Finance Corp. set aside $1.7 billion for loan losses in the first quarter, but that may not be enough, analysts say.
In addition to not performing due diligence relative to the Household – HSBC deal, others think Aldinger and Household International withheld the true condition of the company from HSBC.