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Massive Subprime Layoffs Continue

Massive Subprime Layoffs Continue

Fremont, WMC continue cuts

March 23, 2007

By COCO SALAZAR

photo of Coco Salazar
WMC Mortgage may have cut a significant portion of its sales force while Fremont General Corp., which is exiting the subprime mortgage business, has begun laying off some of its thousands of subprime employees.

WMC engaged in an action of layoffs Thursday due to the mortgage industry’s changing environment, spokeswoman Brandie Young told MortgageDaily.com. The layoffs affect sales employees throughout the country.

The Burbank-Calif.-based company is “not breaking out numbers,” Young said, adding that any number published, “including 500, is inaccurate.”

But a copy of an e-mail from a WMC account executive on the West Coast obtained by MortgageDaily.com suggested the layoffs were significant.

“Effective immediately WMC Mortgage has decided to reduce their sales force across the U.S.,” the message said. “The only remaining local rep is my boss.”

Young declined to disclose the number of employees left at the nonprime wholesale lender. Earlier this month, she said that about 450 prior layoffs on March 8 represented about 20 percent of WMC’s staff.

At Fremont, which has 2,400 subprime employees nationwide, “a portion of those employees” were notified that their jobs will be terminated on May 18, spokesman Daniel Hilley told MortgageDaily.com. He declined to disclose the number of employees affected.

Fremont reported it ceased funding subprime loans earlier this month and asked “many” employees in that business to remain at home on paid leave until further notice,” the Santa Monica, Calif.-based lender explained in an e-mail statement. “The company continues to aggressively pursue its options with respect to its business. Given the uncertainty of this situation and its impact on employment,” Fremont issued the termination notices.

Through May 18, “unless they secure other employment, these employees will remain on Fremont’s payroll and be covered under the employee benefit plans,” according to the statement.


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