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Texas Employees Terminated

 

Texas Employees Terminated

Universal American to lay off 57 and close processing center

September 11, 2007

By COCO SALAZAR

photo of Coco Salazar
Lennar Corp. will shut down a Texas mortgage processing center and lay off the employees.

Subsidiary Universal American Mortgage Co. intends to layoff approximately 57 employees by Oct. 26, when it permanently shuts its Texas processing center in Houston, the company said in a Workers Adjustment and Retraining Notification letter filed with the state.

The employees were reportedly notified Friday that their jobs will be eliminated, six days short of the 60-day advance notice period the WARN Act requires when covered plant closings and mass layoffs will occur.

“[Universal] has chosen to reduce the notice period by six days and provide affected employees pay in lieu of notice for these days because business conditions in the mortgage industry are such that the need for a layoff of this magnitude was not anticipated in time to give 60 days notice,” the Sept. 7 letter read.

Lennar did not immediately return a call for comment.

Volume for Universal, which funds mortgages for Lennar clients, fell about 17 percent annually to $2.3 million during the second quarter ended May 31, 2007, according to a filing with the Securities and Exchange Commission.

Decreased volume, profit per loan and $14.4 million in partial write-offs of land seller notes receivable hurt mortgage operations’ profitability, driving down earnings in Lennar’s financial services segment — to $14.2 billion from $34.6 billion in the second quarter a year earlier, Lennar reported.

Overall, the Miami, Fla.-based homebuilder reported a second quarter net loss of $244.2 million — off from $324.7 a year prior. Lennar expected weak market conditions to continue throughout the year, citing that among the factors that must occur before the market recovered were stabilization in mortgage markets, especially in the subprime sector, and restoration in homebuyer consumer confidence.

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