HSBC Finance Corp. today said it is getting out of the U.S. subprime wholesale mortgage business, a move that will affect 750 employees.

The firm will close its non-core wholesale lending channel, Decision One Mortgage, which originates non-prime mortgages through brokers.

HSBC Finance will focus on originating and servicing loans through its consumer lending branch network under the HFC and Beneficial brands.

Contractual servicing and support functions will remain in place to manage down the current Decision One warehoused volumes, currently standing at US$349 million.

“This is a small part of our U.S. business,” said Michael Geoghegan, group CEO, HSBC Holdings PLC.

“It’s no longer sustainable and not the right place to allocate capital in the future. We said we would make tough decisions and we have done exactly that.”

The move, along with management’s decision in March to discontinue correspondent channel acquisitions in its mortgage services business, means HSBC Finance will record a non-cash charge to eliminate the goodwill allocated to the segment at the time of the acquisition of HSBC Finance.

It will record a non-cash after-tax goodwill impairment of about US$880 million on a U.S. GAAP basis. Further, it will incur approximately US$65 million of after-tax charges for restructuring costs, including one-time employment termination benefits, fixed asset writedowns and facility closure costs. The financial effects will be incurred in the second half of 2007.

“We are delivering the strategy put in place earlier this year to position HSBC Finance’s mortgage business for long-term success,” said Brendan McDonagh, CEO. “Today’s market requires a strong and flexible business platform, and we will focus on our branch network as the primary point to provide our HSBC Finance customers with loans and mortgages.”

There will be no associated goodwill impairment recognized by HSBC Finance’s ultimate parent, HSBC Holdings PLC.