Market Watch is reporting that NovaStar will slash another 275 jobs in its retail loan division as a proposed securities offering that would have raised at least $100 million for operating and funding capital fell through.
In a cost cutting effort NovaStar will close 12 retail branches and trim 275 jobs.
From Market Watch:
NovaStar also said it will “sharply” reduce retail mortgage activity, closing 12 retail origination offices and cutting the number of employees in that part of its business to roughly 125 from 400.
NovaStar said it will now focus mainly on managing its $15.45 billion portfolio of securitized residential loans, plus mortgage securities.
“We are pulling back to focus on NovaStar’s core strengths and preserve liquidity,” Scott Hartman, chief executive of NovaStar, said in a statement. “Suspending wholesale lending and shrinking the retail operation are painful decisions, but we believe it is best, at this point, to concentrate on serving our current customers and managing our portfolio for the benefit of NovaStar shareholders.”
What an agonizingly slow death for one of the bigger subprime lenders. There has to be a point where the company taps out - we must be close.
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[Source: Blown Mortgage]
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