Lehman Brothers said Wednesday that it is closing its Irvine, Calif., subprime lending unit BNC Mortgage LLC and laying off 1,200 employees but will continue to fund loans through its alternative-A unit, Aurora Loan Services LLC.
The investment bank said it is closing the unit because of "market conditions" and said it will take an after-tax charge of $25 million for severance, real estate, and technology costs.
In June, Lehman laid off 400 BNC employees and merged the unit and Aurora into a single mortgage business. It said at the time that it would close 27 branches and be left with five regional operating centers.
