Layoffs in lending top 13,000 in one week
Lehman Brothers Holdings Inc. announced Wednesday it will lay off 1,200 workers as it closes its subprime lending subsidiary, bringing to more than 13,000 the number of layoffs announced by mortgage lenders in the last week.
Lehman Brothers said it expects to record $25 million in after-tax charges related to severance payments, and real estate and technology costs in closing its subprime subsidiary BNC Mortgage LLC, plus $27 million in goodwill write-downs.
In a statement, the investment bank said market conditions had "necessitated a substantial reduction in its resources and capacity in the subprime space."
Lehman Brothers, which according to its latest quarterly report to investors originated $32 billion in residential mortgage loans during the six months ending May 31, said it will continue to originate loans through Aurora Loan Services LLC.
Accredited Home Lenders said Wednesday it was closing its retail lending branch and laying off more than 1,000 workers.
According to the outplacement consulting firm Challenger, Gray & Christmas Inc., there have been an additional 11,040 job cuts in mortgage lending since Friday, including 2,400 planned layoffs announced by SunTrust Banks and 8,640 job cuts announced by First Magnus Financial Corp., Countrywide Financial Corp., Capital One, and the lending unit of Bear Stearns.
The financial industry has announced 87,962 job cuts this year, up 164 percent from last year. About 41 percent of the job cuts were related to the mortgage and subprime lending markets, Challenger said. 
Copyright 2007 Inman News
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