Lehman Brothers Axes BNC Mortgage — Another 1,200 Jobs Gone

A press release this afternoon from Lehman said that the lender was shutting down subprime outfit BNC Mortgage amid deteriorating market conditions:

Lehman Brothers announced today that market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space. As a result, the Firm is closing its BNC Mortgage LLC subsidiary. The Firm continues to originate mortgages in the U.S. through its Aurora Loan Services LLC platform.

The closure affects approximately 1,200 employees in 23 U.S. locations. In connection with the closure, the Firm will record all related after-tax charges, including severance, real estate and technology costs, of approximately $25 million, and a 100% after-tax goodwill write-down of approximately $27 million.

I’d heard about this yesterday, and this closure just underscores my commentary from late yesterday — we’re nowhere near out of the woods on this yet. It’s pretty clear now that a private equity owner or Wall Street investment bank with deep pockets isn’t enough to save subprime lenders at this point.