The parent of BNCÂ Mortgage LLC is shutting down the subprime lender.
Lehman Brothers announced today it would close the Irvine, Calif.-based wholesale lending subsidiary.
About 1,200 employees in 23 offices will lose their jobs, according to the statement.
Mortgages will continue to be originated through Lehman-subsidiary Aurora Loan Services LLC.
Lehman had hoped a restructuring of the unit announced in June as well as 400 layoffs would help BNC survive. That move included combining BNC, which originates business through more than 36,000 independent mortgage brokers, with Aurora — an Alt-A and nonconforming wholesale and correspondent lender.
New York-based Lehman said it will take an after-tax charge of $25 million in addition to writing down $27 in goodwill.
“Market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space,” Lehman said in today’s announcement.
