Lehman Brothers said today that its Aurora Loan Services unit (Alt-A mortgages) would halt wholesale and correspondent mortgage lending, resulting in 1,300 jobs losses and a $40 million charge for severance, technology, and facilities costs.
As a result, operations centers in Lake Forest, California; Sunrise, Florida; and Florham Park, New Jersey will be closed.
“While it was necessary for us to structure our mortgage origination businesses in the U.S. to reflect the change in industry dynamics, we deeply regret the impact this action has on our people,” Ted Janulis, global head of Mortgage Capital for Lehman Brothers, said in a release.
“We will continue to make technology and infrastructure investments in this space, as we reposition the business to reflect the changing industry.”
The company posted the following message on its website regarding the news:
“Aurora Loan Services’ parent company, Lehman Brothers, announced today that it will substantially reduce its resources and capacity in the U.S. residential mortgage origination space in light of the dislocation in the mortgage markets. As a result, Lehman Brothers is suspending all Wholesale and Correspondent mortgage originations at Aurora.
Aurora will continue to originate loans through its direct lending channel, and will maintain its servicing business.
We truly appreciate your business and support over the years. We hope you will consider how Aurora may be able to help you meet your needs in the future.
With sincerest thanks.”
It is believed that the the last day to fund loans already in progress is February 17th, 2008.