Subprime lender First NLC lays off 645 employees
NEW YORK (Reuters) - First NLC Financial Services LLC, a subprime mortgage lender being sold by Friedman, Billings, Ramsey Group Inc (FBR.N), said on Friday it has laid off nearly half of its 1,350 employees as it combats a slumping housing market.
Employees learned of the layoffs on Wednesday, according to Andrew Henschel, First NLC's vice president of corporate governance. About 645 employees are being let go, including more than one-third of those at its Boca Raton, Florida headquarters.
"We have had to reduce staff to compete more effectively," Henschel said in an interview. "Market conditions and the subprime landscape have changed dramatically. We were saddened to let valued employees go, but the landscape has changed."
The layoffs were announced less than a week after FBR said it would sell an 80 percent stake in First NLC to private equity firm Sun Capital Partners Inc. First NLC is being recapitalized, with Sun Capital investing $60 million and FBR investing $15 million.
Subprime lenders make loans to people with weaker credit histories. Many have struggled with rising defaults, higher borrowing costs, stagnating home prices and an unwillingness of investors to buy riskier loans on the secondary market.
(Reporting by Jonathan Stempel)
