The mortgage industry consolidation as Lehman Brothers is merging two of its mortgage originating arms, the Alt-A specialist Aurora and the subprime focused BNC Mortgage in to one unit to reduce redundancies, achieve cost efficiencies and in general reduce staffing overhead.
From Matt at the OC Register:
The investment bank plans to cut about 400 jobs, mostly at BNC and
mostly outside of Orange County, said a spokesman with Lehman. BNC, a
wholesale lender, employs about 1,700 workers in more than 30 branch
offices nationwide. Those will be combined into five regional centers
in Irvine, Concord, Calif., Chicago, Atlanta, and Philadelphia.
More news on the merger here and here.
I’m surprised this didn’t happen earlier to be honest. Lehman has a huge hand in mortgage originations and both BNC and Aurora are huge players. With profit margins tightening on Wall Street Lehman needs to realize efficiencies on all aspects of its business – especially on the mortgage side – to keep the shareholders as happy as possible.
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