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| A Los Angeles thrift is cutting more than 60 mortgage jobs as it is slapped with a cease-and-desist order.Cease-and-desist orders were issued by the Office of Thrift Supervision against FirstFed Financial Corp. and subsidiary First Federal Bank of California, FSB, a press release Monday said. The orders require the financial institution to conserve capital, improve operations and report back to the regulator quarterly until 2011.
“FirstFed has been working with the OTS to address the challenges we are currently experiencing and we intend immediately to begin satisfying our obligations under today’s orders,” FirstFed Chief Executive Officer Babette E. Heimbuch said in the statement. “We have made substantial progress on addressing a number of the OTS’s concerns, and we hope to finalize those plans promptly so that we can focus our energies on meeting the needs of our clients and communities.” The company reported earlier this year that its negative-amortization adjustable-rate mortgages had reached the maximum principal balances, and higher payments drove defaults that led to second-quarter loan-loss provisions of $90 million. As part of cost-cutting measures, FirstFed said it will eliminate 62 positions. The layoffs work out to around 10 percent of the company’s current workforce. The job cuts primarily impact employees in its single-family lending operation and commercial lending business. Annual cost savings are estimated at more than $4 million. “It is with deep regret that we must take this action,” Heimbuch added. “Given the economic pressures we are under, doing so has become necessary.” |
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