National Mortgage News is reporting today that Lehman Brothers has decided to merge its BNC and Aurora mortgage operations, long rumored to be taking place:

Lehman Brothers said Wednesday that it will merge its subprime and alternative-A mortgage units into a single business and trim 400 positions over the next 30 to 90 days.

According to the story, the company will keep correspondent lending in Denver, where Aurora has been located, while both Alt-A and subprime wholesale operations will consolidate at BNC’s Irvine, Calif.-based headquarters. NMN doesn’t specify if Lehman has plans to consolidate loan administration or not, and if the two companies will retain their separate company identities relative to the split in operations. (It would seem to this blogger that we may see a Lehman Brothers Mortgage Co. before long.)