Negative subprime mortgage news continues to cause disorder in the market, despite the historical end-of-August lull.
In recent headlines, Lehman Brothers announced the close of BNC Mortgage, its subprime mortgage originator. The closure affects approximately 1,200 employees in 23 U.S. locations. Lehman said it will continue to originate mortgages in the U.S. through Aurora Loan Services. However, the bank will take after-tax charges, including severance, real estate and technology costs of roughly $25 million, and a write-down of approximately $27 million on the closed business.