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Lehman Bros. Amputates Mortgage Arm (Another 1200 people on the unemployment lines)
http://www.thestreet.com/s/lehman-bros-amputates-mortgage-arm/newsanalysis/banking/10375812.html?puc ^ | 8-22-07 | Laurie Kulikowski

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.


TOPICS: Business/Economy; Miscellaneous; News/Current Events
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1 posted on 08/22/2007 12:33:20 PM PDT by Hydroshock
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To: Hydroshock

The Invisible Hand never sleeps.


2 posted on 08/22/2007 12:36:40 PM PDT by TheDon (The DemocRAT party is the party of TREASON! Overthrow the terrorist's congress!)
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To: Hydroshock
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."

Lehman bros: true space cadets!

3 posted on 08/22/2007 12:38:08 PM PDT by Jagman (I drank Frank Rabelais under the table!)
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To: Hydroshock
"poor market conditions in the fraudulent mortgage space"
4 posted on 08/22/2007 12:42:45 PM PDT by dynachrome (Henry Bowman is right.)
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To: Hydroshock

Oh the tragedy, if only somebody somewhere had been able to forsee this. :-)


5 posted on 08/22/2007 12:53:23 PM PDT by jiggyboy (Ten per cent of poll respondents are either lying or insane)
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To: Hydroshock

“Amputates mortgage arm”

What, are they letting Jim Cramer write headlines now?


6 posted on 08/22/2007 1:15:02 PM PDT by Nervous Tick
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To: Nervous Tick
What, are they letting Jim Cramer write headlines now?

BooYah!!, Jimbo, are you bearish on Lehman Bros.!???

7 posted on 08/22/2007 1:54:31 PM PDT by BlabItGrabIt (Sly, Shy, and Wry)
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To: dynachrome

Not all subprime loans are fraudulent. In fact, most are not.


8 posted on 08/22/2007 1:56:06 PM PDT by RockinRight (Fred Thompson once set fire to a crowd of liberals simply by puffing his cigar and staring real hard)
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To: RockinRight

“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.


9 posted on 08/22/2007 2:01:52 PM PDT by dynachrome (Henry Bowman is right.)
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To: dynachrome

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.


10 posted on 08/22/2007 2:04:47 PM PDT by RockinRight (Fred Thompson once set fire to a crowd of liberals simply by puffing his cigar and staring real hard)
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To: RockinRight
In fact, most are not.

In fact, the vast majority are not.

11 posted on 08/22/2007 2:07:11 PM PDT by Petronski (Why would Romney lie about Ronald Reagan's record?)
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To: RockinRight

“sound finacials”
Against sound spellcheck, too! “Financials” of course.


12 posted on 08/22/2007 2:12:45 PM PDT by dynachrome (Henry Bowman is right.)
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To: RockinRight

I’m self employed. And looking to buy in a year or so.

I’m thinking I’m screwed for a while.


13 posted on 08/22/2007 3:55:35 PM PDT by D-fendr
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To: D-fendr

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.


14 posted on 08/22/2007 5:26:32 PM PDT by RockinRight (Fred Thompson once set fire to a crowd of liberals simply by puffing his cigar and staring real hard)
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To: RockinRight

thanks very much Rockin, I’ll certainly keep you in mind..

and thanks for making me feel a bit more optomistic.

D-


15 posted on 08/22/2007 7:39:06 PM PDT by D-fendr
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