NovaStar Financial Inc., a Kansas City-based subprime mortgage lender, said on Friday it is closing its Lake Forest wholesale operations due to tough market conditions.
The closure will result in 170 local job losses, and are part of 500 layoffs the company announced today. The company is also closing a wholesale division in Ohio and cutting about 70 jobs at its headquarters.
More than 50 job cuts were made at the company’s Lake Forest operations in March.
The cuts represent about 37% of NovaStar’s workforce. Company officials said the job cuts would begin immediately and would conclude by the end of 2007. The company employed more than 2,000 people at the beginning of the year.
The mortgage lender also said it will temporarily stop offering home loans through brokers, although it will continue to offer mortgages through its retail operations.
The layoffs are needed to “adapt to industry-wide credit conditions and disruptions in capital markets,” chief operating officer Lance Anderson said in a statement.
NovaStar said second-quarter loan volume was down 73% from a year ago.
