Skip to comments.Lehman Bros. Amputates Mortgage Arm (Another 1200 people on the unemployment lines)
Posted on 08/22/2007 12:33:18 PM PDT by Hydroshock
The New York investment bank will cut 1,200 positions in 23 locations as a result of the closing of BNC Mortgage. It will take an after-tax charge of $25 million and a goodwill write-down of $27 million, it said.
Lehman said that poor market conditions in the mortgage space of late have "necessitated a substantial reduction in its resources and capacity in the subprime space," according to a release.
The company said earlier this summer that it was combining its two non-prime residential mortgage businesses - Aurora Loan Services of Littleton, Colo., which specializes in Alt-A mortgages, and BNC Mortgage of Irvine, Calif. Lehman had begun laying off employees at BNC Mortgage in June.
Lehman said it continues to originate mortgages through Aurora's platform.
The closing of BNC Mortgage comes as the nonbank mortgage industry implodes. Dozens of lenders that cater to borrowers with less than stellar credit histories have closed up shop as a result of rising delinquencies and defaults in so-called subprime loans. Others closing up shop this week include Accredited Home's (LEND - Cramer's Take - Stockpickr) retail unit and Capital One's (COF - Cramer's Take - Stockpickr) GreenPoint bank.
Shares of Lehman fell 34 cents to $57.20.
The Invisible Hand never sleeps.
Lehman bros: true space cadets!
Oh the tragedy, if only somebody somewhere had been able to forsee this. :-)
“Amputates mortgage arm”
What, are they letting Jim Cramer write headlines now?
BooYah!!, Jimbo, are you bearish on Lehman Bros.!???
Not all subprime loans are fraudulent. In fact, most are not.
“most are not.”
Letter of the law, sure, but I think most of the loans were made against sound finacials in the sub prime market. As long as prices were pumped up, no problem. I also wonder how many appraisals were inflated to match the loans.
Any “no income verification” or loan made to illegals is fraud IMHO.
Illegals - yes those are fraud.
No Income Verification? Originally not, but became so as people abused them.
Originally, they were for self-employed people, or those who made a lot of tip money and didn’t claim it on taxes - there was no other way they could every qualify.
Then, guidelines loosened, and people abused them to buy houses they honestly couldn’t afford.
In fact, the vast majority are not.
Against sound spellcheck, too! “Financials” of course.
I’m self employed. And looking to buy in a year or so.
I’m thinking I’m screwed for a while.
Maybe, maybe not. If you have verifiable assets, some options exist. If your “AGI” on your 1040 looks decent, or does so when depreciation is added back in, you may also fare OK.
Also - some lenders allow the average bank deposits for a year to count as income - although mostly subprime lenders do that. Freepmail me for more info if you wish.
thanks very much Rockin, I’ll certainly keep you in mind..
and thanks for making me feel a bit more optomistic.
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