Per Bloomberg:

Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage-backed bonds, reported a smaller profit decline than analysts estimated after it limited losses on home loans and leveraged-buyout financing. Net income fell 3 percent to $887 million, or $1.54 a share, in the third quarter from $916 million, or $1.57, a year earlier, the New York-based company said today in a statement. The average estimate of 16 analysts surveyed by Bloomberg was $1.48 a share.

Mortgage-related losses led to a $700 million writedown, Lehman said, losses that were offset by growth in other areas of the investment bank’s business. The bank also said its expenses for the quarter included a $44 million charge associated with restructuring its mortgage business. Lehman said on September 6th that it would cut 850 employees amid a reorganization of its core mortgage business; Lehman also said in August that it would close its BNC Mortgage sub, eliminating 1,200 jobs. Update: While its tangential to the mortgage market, the WSJ’s Deal Journal discusses how a pullback in the LBO market has further hit Lehman, noting that the firm has suffered losses over $1 billion on paper for the LBOs it has agreed to fund.

About the Author

Most Popular Articles

Freddie Mac: Mortgage rates reverse course from last week’s low

This week, the average U.S. fixed rate for a 30-year mortgage jumped to 3.69%. That’s still more than a percentage point lower than the 4.85% of the year-earlier week.

Oct 17, 2019 By

Latest Articles

Dallas tornado leaves 15 miles of homes with at least 50% damage probability

Tornados hit Dallas Sunday night, one gliding along the ground for about 15 miles. The area has at least 50% destruction probability, CoreLogic data shows.

Oct 21, 2019 By