Accredited Home Lenders announced this morning that it is shutting down its retail lending business and will suspend the origination of loans through its wholesale channel.
Accredited will shut down 65 branches and cut the workforce from 2,600 to 1,000, while closing five of its ten brokered loan offices.
Accredited will cut 180 of the 400 jobs at its headquarters in San Diego, 480 job at its retail lending unit, and 490 at its wholesale operations.
A statement from the COO and President, Joseph Lydon, said the company would no longer accept applications come August 22, 2007, but would honor existing funding commitments.
The news came just one day after the company announced the sale of $1 billion in assets to keep the company afloat.
It is uncertain how this news will affect the ongoing merger turned lawsuit with Lone Star Funds, who are currently attempting to back out of the acquisition.
Shares of Accredited Home fell 4.4% to $6.24 in midday trading.