BNC Mortgage Inc., part of Lehman Brothers Holdings Inc., has laid off about 100 Orange County workers in another sign of contraction for the local subprime mortgage sector.
The company laid off about a quarter of its 400 local workers, based on information BNC filed with state regulators.
Job cuts played out in recent weeks, according to Lehman spokeswoman Kerrie Cohen.
BNC and another Lehman mortgage unit, Aurora Loan Services LLC of Littleton, Colo., both saw layoffs, Cohen said.
“There were reductions resulting from a market cycle reflecting lower mortgage originations,” she said. “There was a realignment with both companies.”
Aurora plans to close an Irvine office by April, cutting about 100 jobs.
BNC joins other subprime lenders that have announced layoffs or made cuts in recent months due to rising interest rates, slimmer profits and stepped up competition.
Late last year, ACC Capital Corp., the parent of subprime industry leader Ameriquest Mortgage of Orange, said it plans to cut about 1,500 jobs, including about 325 in OC.
Another ACC unit, Orange-based Argent Mortgage, recently cut about 600 workers companywide.
Irvine-based ECC Capital Corp. also said it plans to lay off 440 workers, a quarter of its work force. Greenlight Financial Services of Irvine laid off some people at the end of last year.
BNC is one of several lenders here that make loans to borrowers with imperfect credit. Most of the sector’s top players are in OC.
Top Players Here
They include Ameriquest, Irvine-based New Century Financial Corp., Washington Mutual Inc.’s Anaheim-based Long Beach Mortgage Co., Irvine-based Option One Mortgage Corp., a unit of H & R; Block Inc., and Fremont Investment & Loan in Anaheim.
BNC was the No. 7 wholesale subprime lender in the third quarter with $4.9 billion in mortgages. BNC and other wholesalers fund mortgages generated by brokers. The company works with some 24,000 brokers nationwide.
Subprime lenders boomed for much of the past few years. Starting last year, rising interest rates started to squeeze profits as they forced up what subprime lenders pay to buyers of mortgages packaged as bonds.
BNC Background
BNC started in 1995 and has done more than $50 billion in home loans since then, according to the company.
The company employs more than 2,200 people nationwide.
Lehman helped take BNC private and acquired a stake in the company in 2000. It bought out the rest of BNC in 2003.
The company has been part of a restructuring in the past year at Lehman.
In the fall, Lehman combined BNC with its Finance America unit, with BNC as the surviving brand, according to reports.
Some of the recent layoffs came at a former Finance America unit in Irvine.
In May, BNC’s Kelly Monahan was appointed president of the combined business, which is run from BNC’s headquarters at the corner of MacArthur Boulevard and Main Street in Irvine.
BNC moved its headquarters from elsewhere in Irvine to the eight-story Koll Center Irvine North office tower near John Wayne Airport about four years ago.
