Lehman Brothers Holdings Inc. announced today that it has closed its subprime subsidiary business BNC Mortgage amid worsening market conditions.
Irvine, California based BNC Mortgage LLC will be combined with the Lehman Brothers Aurora Loan Services LLC, forming a single unified residential mortgage business.
The closure will result in the loss of 1,200 jobs at 23 offices nationwide.
BNC’s Web site says the mortgage lender is no longer accepting new apps and will return any files that have not yet been approved.
Files that have already been approved will continue to be processed and ultimately fund assuming conditions are satisfied.
Lehman Brothers expects to record a $25 million charge for severance pay, real estate, and technology costs, and a $27 million accounting charge as a result of the closure.
Shares of Lehman Brothers dipped slightly in after-hours trading, though the news will probably be regarded as a positive rather than a negative.
Take a look at the current, ever-expanding list of closed mortgage companies.