Accredited Home Lenders Holding Co. said this morning that it will lay off 1,600 of its 2,600 employees and that it has halted originating new loans amid what it called "ongoing turmoil in the non-prime mortgage industry." The San Diego-based lender said it would close "substantially all" of its retail lending business -- 60 branch locations and 5 retail support locations; that it would shutter five of its ten wholesale divisions; and that it would "substantially" reduce staffing at its Inzura Settlement Services division; and that it would cut roughly half of the company's headquarter's based staff. The company's servicing platform is not impacted by the downsizing effort, the company said in its statement:
James A. Konrath, chairman and chief executive officer, commented, "These difficult decisions were made out of necessity in light of the continued and widely publicized turbulence in the mortgage and financial markets, but with a heavy heart. Many of the people who are affected by these decisions have been productive, dedicated, and loyal colleagues for many years. We will miss them and the enthusiasm and creativity that they brought to their jobs every day at Accredited." The Company reported that neither its Canadian operations nor its servicing platform for its loan portfolio of $8.4 billion as of June 30, 2007 will be affected by the restructuring. Mr. Konrath added, "Accredited's delinquency and loss numbers have historically been among the best in the industry. Even though our servicing ratings have been downgraded over liquidity concerns in recent months, we intend to maintain the quality of our servicing operations and expect to continue providing the highest level of loan servicing for our bond investors."
I haven't seen any word from Lone Star regarding how this development might impact the contentious negotiations between it and Accredited for a purchase, but I'm sure today's move by the lender will play into any future negotiations on an acquisition. My best to those caught up in the staff reduction effort; I'm sure these aren't easy times.