HSBC Finance Corp. wanted a better mortgage modification mousetrap.At the beginning of the year, nearly a fifth of the Mettawa, Ill., lender’s real estate loan portfolio had been modified after becoming delinquent. Freezes on initial rate resets for another roughly $1.3 billion of adjustable-rate mortgages were due to lapse this year. And a bottom in home prices was still somewhere over the horizon.
In January it launched the Comet program, an enhanced version of its Foreclosure Assistance Program that looks for additional types of risk and helps the unit offer more modifications — in some cases, before the borrower even requests help.
HSBC Finance, a unit of HSBC Holdings PLC of London, said it was seeking to refine its methods by mining the wealth of data it had accumulated and searching for default patterns.
The unit wanted to retool its modification machinery — which focused on a customer’s financial wherewithal — to reflect an environment in which home prices could fall steeply in some markets and unstable product.
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