We're like a cat on our ninth life around here. I'm glad we've survived for the time-being, but I have to imagine major changes are on the way. I don't see why anybody would purchase us as is unless they had plans to shake things (or people) up. I guess that's what Sun Capital excels in.
FBR Group To Sell First NLC To Sun Capital Partners Transaction Includes Recapitalization of First NLC, Reduces FBR's Ownership to 20%
ARLINGTON, Va., July 26 /PRNewswire-FirstCall/ -- Friedman, Billings, Ramsey Group, Inc. (FBR Group) today announced that it has signed a definitive agreement with an affiliate of Sun Capital Partners (Sun Capital) that will result in a $75 million recapitalization of First NLC Financial Services, LLC (FNLC), FBR Group's non-conforming mortgage origination subsidiary. Sun Capital and FBR Group will invest $60 million and $15 million respectively, on a pari passu basis.
As a result of this transaction, FBR Group's future exposure to FNLC will be limited to its $15 million investment in the recapitalization, plus a $3 million indemnification to Sun Capital for certain potential liabilities. During the third quarter, FBR Group expects to fund approximately $15 million in losses associated with further restructuring and operating costs incurred prior to entering into the transaction with Sun Capital. FBR Group will also retain ownership of approximately $250 million of conforming and non- conforming mortgages recently originated by FNLC which are expected to be sold or securitized during the third quarter.
Full article: http://money.cnn.com/news/newsfeeds/articles/prnewswire/NETH05726072007-1.htm
Subscribe to:
Post Comments (Atom)
56 comments:
Am I correct in recalling that the Sun folks are cronies of our upper management team?
you are correct--somebody is doing someone a favor. Sun Capital owned FNLC at one time, the Henschels bought it back and sold to FBR.
So sad, but if they do decide to bailout "the boys". Lets hope they go with them!
Or at the very least fire SECONDARY!
If I remember correctly, Sun Capital bailed out FNLC in 98.....
looks like the hammer is supposed to come down this week with about 50% of the retail offices closing and several hundred layoff's. from what I hear people have already started taking home personal items in anticipation.
Just an FYI ....
I just heard that they had a MAJOR layoff at FNLC today (just about an hour ago). Someone said that as many as 80% of the people were let go. And the rest of them were demoted to cover the loss in personnel.
Wow, was that 80% layoff at DFB? HQ or is that 80% retail personnel?
I hope it's those smug bastards from DFB who stayed around when the first 2 rounds of layoffs started.
reminds me of a song by John Mellancamp. "when the walls, come tumbling down....."
I'd love to read Neal's email to the remaining employees--anyone have it??
"I'd love to read Neal's email to the remaining employees--anyone have it??"
It probably has "DOING WHAT IS REQUIRED" in it somewhere.
DFB/Boca Raton Office
It's true.. I was in one of the many branches closed down today. Supposedly we get severance pay.. wonder if this will really happen. I've heard only 2 branches left in California
Remember 8 percent is enough?
U.S. Department of Labor
Employment and Training Administration
Fact Sheet
The Worker Adjustment and Retraining Notification Act
A Guide to Advance Notice of Closings and Layoffs
--------------------------------------------------------------------------------
The Worker Adjustment and Retraining Notification Act (WARN) was enacted on August 4, 1988 and became effective on February 4, 1989.
General Provisions
WARN offers protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union); to the State dislocated worker unit; and to the appropriate unit of local government.
Employer Coverage
In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked less than 6 months in the last 12 months and not counting employees who work an average of less than 20 hours a week. Private, for-profit employers and private, nonprofit employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government. Regular Federal, State, and local government entities which provide public services are not covered.
Employee Coverage
Employees entitled to notice under WARN include hourly and salaried workers, as well as managerial and supervisory employees. Business partners are not entitled to notice.
What Triggers Notice
Plant Closing: A covered employer must give notice if an employment site (or one or more facilities or operating units within an employment site) will be shut down, and the shutdown will result in an employment loss (as defined later) for 50 or more employees during any 30-day period. This does not count employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week for that employer. These latter groups, however, are entitled to notice (discussed later).
Mass Layoff: A covered employer must give notice if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer's active workforce. Again, this does not count employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week for that employer. These latter groups, however, are entitled to notice (discussed later).
An employer also must give notice if the number of employment losses which occur during a 30-day period fails to meet the threshold requirements of a plant closing or mass layoff, but the number of employment losses for 2 or more groups of workers, each of which is less than the minimum number needed to trigger notice, reaches the threshold level, during any 90-day period, of either a plant closing or mass layoff. Job losses within any 90-day period will count together toward WARN threshold levels, unless the employer demonstrates that the employment losses during the 90-day period are the result of separate and distinct actions and causes.
Sale of Businesses
In a situation involving the sale of part or all of a business, the following requirements apply. (1) In each situation, there is always an employer responsible for giving notice. (2) If the sale by a covered employer results in a covered plant closing or mass layoff, the required parties (discussed later) must receive at least 60 days notice. (3) The seller is responsible for providing notice of any covered plant closing or mass layoff which occurs up to and including the date/time of the sale. (4) The buyer is responsible for providing notice of any covered plant closing or mass layoff which occurs after the date/time of the sale. (5) No notice is required if the sale does not result in a covered plant closing or mass layoff. (6) Employees of the seller (other than employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week) on the date/time of the sale become, for purposes of WARN, employees of the buyer immediately following the sale. This provision preserves the notice rights of the employees of a business that has been sold.
Employment Loss
The term "employment loss" means:
(1) An employment termination, other than a discharge for cause, voluntary departure, or retirement;
(2) a layoff exceeding 6 months; or
(3) a reduction in an employee's hours of work of more than 50% in each month of any 6-month period.
Exceptions: An employee who refuses a transfer to a different employment site within reasonable commuting distance does not experience an employment loss. An employee who accepts a transfer outside this distance within 30 days after it is offered or within 30 days after the plant closing or mass layoff, whichever is later, does not experience an employment loss. In both cases, the transfer offer must be made before the closing or layoff, there must be no more than a 6 month break in employment, and the new job must not be deemed a constructive discharge. These transfer exceptions from the "employment loss" definition apply only if the closing or layoff results from the relocation or consolidation of part or all of the employer's business.
Exemptions
An employer does not need to give notice if a plant closing is the closing of a temporary facility, or if the closing or mass layoff is the result of the completion of a particular project or undertaking. This exemption applies only if the workers were hired with the understanding that their employment was limited to the duration of the facility, project or undertaking. An employer cannot label an ongoing project "temporary" in order to evade its obligations under WARN.
An employer does not need to provide notice to strikers or to workers who are part of the bargaining unit(s) which are involved in the labor negotiations that led to a lockout when the strike or lockout is equivalent to a plant closing or mass layoff. Non-striking employees who experience an employment loss as a direct or indirect result of a strike and workers who are not part of the bargaining unit(s) which are involved in the labor negotiations that led to a lockout are still entitled to notice.
An employer does not need to give notice when permanently replacing a person who is an "economic striker" as defined under the National Labor Relations Act.
Who Must Receive Notice
The employer must give written notice to the chief elected officer of the exclusive representative(s) or bargaining agency(s) of affected employees and to unrepresented individual workers who may reasonably be expected to experience an employment loss. This includes employees who may lose their employment due to "bumping," or displacement by other workers, to the extent that the employer can identify those employees when notice is given. If an employer cannot identify employees who may lose their jobs through bumping procedures, the employer must provide notice to the incumbents in the jobs which are being eliminated. Employees who have worked less than 6 months in the last 12 months and employees who work an average of less than 20 hours a week are due notice, even though they are not counted when determining the trigger levels.
The employer must also provide notice to the State dislocated worker unit and to the chief elected official of the unit of local government in which the employment site is located.
Notification Period
With three exceptions, notice must be timed to reach the required parties at least 60 days before a closing or layoff. When the individual employment separations for a closing or layoff occur on more than one day, the notices are due to the representative(s), State dislocated worker unit and local government at least 60 days before each separation. If the workers are not represented, each worker's notice is due at least 60 days before that worker's separation.
The exceptions to 60-day notice are:
(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;
(2) unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; and
(3) Natural disaster. This applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.
If an employer provides less than 60 days advance notice of a closing or layoff and relies on one of these three exceptions, the employer bears the burden of proof that the conditions for the exception have been met. The employer also must give as much notice as is practicable. When the notices are given, they must include a brief statement of the reason for reducing the notice period in addition to the items required in notices.
Form and Content of Notice
No particular form of notice is required. However, all notices must be in writing. Any reasonable method of delivery designed to ensure receipt 60 days before a closing or layoff is acceptable.
Notice must be specific. Notice may be given conditionally upon the occurrence or non-occurrence of an event only when the event is definite and its occurrence or nonoccurrence will result in a covered employment action less than 60 days after the event.
The content of the notices to the required parties is listed in section 639.7 of the WARN final regulations. Additional notice is required when the date(s) or 14-day period(s) for a planned plant closing or mass layoff are extended beyond the date(s) or 14-day period(s) announced in the original notice.
Record
No particular form of record is required. The information employers will use to determine whether, to whom, and when they must give notice is information that employers usually keep in ordinary business practices and in complying with other laws and regulations.
Penalties
An employer who violates the WARN provisions by ordering a plant closing or mass layoff without providing appropriate notice is liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days. The employer's liability may be reduced by such items as wages paid by the employer to the employee during the period of the violation and voluntary and unconditional payments made by the employer to the employee.
An employer who fails to provide notice as required to a unit of local government is subject to a civil penalty not to exceed $500 for each day of violation. This penalty may be avoided if the employer satisfies the liability to each aggrieved employee within 3 weeks after the closing or layoff is ordered by the employer.
Enforcement
Enforcement of WARN requirements is through the United States district courts. Workers, representatives of employees and units of local government may bring individual or class action suits. In any suit, the court, in its discretion, may allow the prevailing party a reasonable attorney's fee as part of the costs.
Information
Specific requirements of the Worker Adjustment and Retraining Notification Act may be found in the Act itself, Public Law 100-379 (29 U.S.C. 210l, et seq.) The Department of Labor published final regulations on April 20, 1989 in the Federal Register (Vol. 54, No. 75). The regulations appear at 20 CFR Part 639.
General questions on the regulations may be addressed to:
U.S. Department of Labor
Employment and Training Administration
Office of Work-Based Learning
Room N-5426
200 Constitution Avenue, N.W.
Washington, D.C. 20210
(202) 219-5577
yeah I got let go today too...
We get pay and benefits for the next 60 days (hooray!).... yeah whatever.. so long First NLC, oops I mean LAST NLC.
fullundred, I have a question for you.
Why did you stay with the place? I can understand if you were retail, you can always get another job with another place. But if you were on the wholesale side what kept you there the last 6 months?
Since the 2nd round of layoffs I started looking and applying elsewhere. The competition is rough and I am still looking :-(
I am glad to see First NLC shutting down. I did work for them in the NE area. I went thru 3 managers in one month. I never saw such ineptitude in my 7 years in the business. one office i worked at they slept under the desks during the day. Another office would play the movie Boiler Room to get pointers.
What really upset me was that they were not doing right by the applicants. I feel very bad that I was associated with this company and may have led some people into situations where they are now losing their homes.
Hey the upside is this round will get 60 days paid + benefits. Per the law!
Much better than the last round got.
I was retail.. I was given less than a week to transfer from one state to another. Had to pay all expenses out of pocket.. My thanks from the company was guess what here's your last pay check and next pay period you'll get a 2 weeks severance check mailed to you. Did anyone from last round ever receive their severance pay. I know they never have matched or put funds into my 401k .
To "By the Book", I am totally with you. The reason that I no longer work for FNLC is because I would not conform to their lending practices. In my mind, the loans that they wanted me to sell were not in the customers's best interst and I did not want to be a part of that.
MortgageBrat -
I'm sorry you went through that. If it's any comfort to you I think you will definately get your severance pay, that's one of the few thing's FNLC followed through with on the first and second round of layoffs.
Keep an eye on that 401K though.
You've got to remember not all of FNLC was evil, just the old guy and a few others under him.
Good luck to you. You'll live, just make sure you do some research on your next employer. Make sure they dont have NY accents and live in FL. if you know what I mean.
Calling people evil for trying to make a dollar is sad. What gives you the right to judge? Are you perfect? Do you have the guts to start a company and give thousands of people a job and benefits? Would you like to be judged the way you judge others? You sound like "crybabies".
This is an industry wide problem. When the company was making money, many of you profited.
Many many people have lost their jobs and homes. The people who took out these loans are just as guilty as the sales reps who sold the loans and the management team who created the guildlines, etc.
If someone goes to Las Vegas and gambles $10,000 and loses his home, is it the casino's fault?
Maybe you should get over feeling sorry for yourselves and move on.
Employment is voluntary. No one force anybody to work for First NLC. Each and every person who came to work at First NLC took the position offered for their own personal reasons. When you were offered the job, you could have said 'no thanks". Instead you complain because the company no longer has the ability to pay you. If the truth were known, many of you would have quit or not have accepted employment with this company had you received a better offers from someone else.
The company is also providing you with severance pay and benefits plus you are eligible for unemployment. This gives you time to find a new position. If you worked for a smaller company or if First NLC was shutting the doors, you would be receiving a lot less.
If this is what you call appreciation, I would hate to be your next employer.
I quit TLC two weeks ago, grabbed a job with a good broker, and got off of that sinking ship before the impending doom came. I was an LO for five months, some of the most comical of my professional career. The ineptitude and overall incompentance of NLC and it's "leadership" was nothing short of astounding.
I never was allowed to close a single loan that I can honestly say was a fair deal for my borrowers. The underwriting department was so unbelievably incompentant and uncapable of cognitive thought that at times their reasoning skills seemed to be all but non existant. My area manager was literally the most abbrasive, annoying, illogical human being that I have ever met.
I recognized the coming signs early on, the second month I was with the company they decided one day during the middle of the month to a.) cut our commission payscale in half b.)jack rates up c.) eliminate the 9.25 pricing program (which was really the only way to make a loan doable) and d.) closed the wholesale side of the company almost completely down. Everyones pipeline died in a matter of minutes thereafter. We all laughed at the "Doing what is required" email and the two hour conference call where we were given the great news by our fearless leadership.
Worst compay I have ever worked for, hands down. Two weeks removed and it is nothing more than a bad memory. To those of you who were fired today, I am sympathetic but also very happy for you as well. You lost NOTHING today....the grass IS greener elsewhere.
For the ones still in the trenches trying to book loans, you also have my sympathy, I wouldn't trade places with you for a million $$$ Best of luck.
toobad -
You need to take your blinders off. Evil is what these people were. Evil people taking advantage of others, whether they were employees or customers it is plain and simple. How much money is enough? Apparently all the money in the world was not enough for these evil people. And I’m talking about FNLC before FBR; yes I’m talking about when it was still a Henschel owned company. First it was NLC, and then later when it was First NLC.
Try to prove me wrong, but you can’t.
If the employees welfare was in FNLC's best interest they would probably still have jobs wouldn’t they? After all of those "do what is required" memo's that insinuated they have the employee’s best interest in mind?
Bottom line – this company sold out twice and the employee’s payed the price. The Henschels got rich and will likely do it all over again 4-6 years from now on the labor of good honest people.
Too bad those good and honest people get left in the dust.
What would make you (or an evil person) happy? All the money you could spend - or more than all the money you can spend? All of it at the price of innocent peoples labor and faith in an employer.
Either way its evil.
"Toobad said... Blah, bleh, blah...."
HI NEAL :)
It is amazing to read your justification. Why don't you use your own money and start a company and give thousands of people jobs? No one put a gun to your head and said you have to work for these people. You choose to take the job. If you were not happy, you should have found a job elsewhere? Apparently you have worked for the company for some time, why don't you ask yourself why if you have no respect for the Henschels? You did not mind spending the money you were paid.
Grow up, life isn't fair. While you are complaining about a job you voluntarily took, some family is crying because their son was killed in Iraq, or their child was killed in a car wreck, or a family member died because of a natural catastrophy.
You are on a pity party and I refuse to feel sorry for you. Grow up, the Henschels do not owe you a house and a car. If you don't like being at the mercy of an employer for your financial well-being, then start your own company.
If the family has money and you don't, whose fault is it? I guess money is what makes you happy and you are jealous of people who have money and think they should just give it to you because why? Let me guess, it is because you went to work for them.
I could say you are "evil" for complaining on a blog under a psuedo name about a company who gave you a job when you asked for one and paid you what you agreed to work for but I won't.
If you were not happy with the money you were making, maybe you should have cut a better deal or find someone else to work for.
I can tell you in my 10 years in this industry. The absolute worst professional experience I ever had was with First NLC.
They got greedy and tried to branch into too many areas, with out the knowledge to sucessfully execute the new ventures. Costing people lots of money. And that rest solely on the management with Henschels control.
My stay was brief due to the sheer stupidity within the Secondary area. Not the workers THE MANAGEMENT - L - T - M. And non-management J.M. What a joke they are.
The M.O. is "whatever cost necessary" to make the boys happy, with no regard for what we were actually doing.
I am not complaining I freely chose to work for them. But as soon as I figured out how bad this management was, and how much they looked the other way on everything. I started looking immediately.
The management has been there so long they have completely lost the ability to be objective. And recognized their share of the blame.
You layoff the majority of your worker staff and yet you keep all of the top management still???
Most of these people have not actually worked in years in this business. They have been sitting so long in an office looking busy. They would not know what to do with a file if you threw it down in front of them and told them to work it. They only know how to call someone in there office and tell them to work it.
So if anything comes of the latest purchase from Sun Partners. Shake up that management so this cannot EVER repeat itself again. The current management is so tied to the Henschels they will not be loyal to the company that currently owns them they will always have it placed with the Henschels. That needs to come to an end. For everyone best interest.
I read all your complaints and think, "do they actually believe this b.s". One person or two people cannot control a company as large as First NLC.
The clientele this ocmpany services are people who had money issues. People who have credit scores in the 500's. These are not people who pay their bills on time and have perfect credit scores. These are people who were late, had bankruptcies, and/or other issues.
Who is to blame for these people losing their homes, etc? I would guess themselves and the sales reps who sold the loans and who did not explain the terms to the client. (Note: At the closing table the lawyer will explain each and every document.)
You were part of the team. Your paycheck came from the same pool of money. Now you complain, point fingers, and say it was somebody else's fault.
Why don't you stop complaining and move on with your life? Maybe this is your life? Maybe all you are is a negative person who looks to find fault with others and have done better than you. I bet you were complaining the entire time you were spending the money. Would you consider yourself a hypocrite or just plain unhappy?
You all sound like spoiled brats and think the world owes you something. If someone has more than you, they are "evil". Too bad you are not smart enough or business suave enough to make it to the top. All you are is whiners who expect people to hand you money. Go start your own company and run it the way you want no one is stopping you. Come to think of it, you are stopping yourselves by wasting time and complaining.
WOW TOO BAD You sound like you are one of the managers.
You sure are trying awful hard to finger point here back at the employees.
Hmmm Curious!
Toobad is management - he is correct in saying the company owes us nothing. However, management should have been a little more honest with the employees. According to inside sources, Toobad is the same person who accused my branch of wrongdoing and terminated the branch manager.
toobad -
Looks like I hit a nerve :)
You're obviously never going to get it. I've done nothing more than share my opinion of how badly this company treated it's employees. Whats wrong with that? Last I heard it was a free country. I happen to have a lot of friends who worked for you and they were treated badly, used and lied to.
Show me where I complained about money or lack of? show me where I claimed I was never paid enough. You're the one who seems to be obsessed with paychecks and money. It figures, your one of them.
Start my own company? Theres no need to, I'm doing fine working solo. If theres one positive out of all this its the fact that I will never let myself get in to a position where I have to work for someone like "toobad" again.
Don't you find it odd that everyone else who has posted does not share your opinion or agree with you? Perhaps you're the one with the charactor flaw.
Yes, "too bad" must be management as this is the typical mindset of FNLC. You are correct that everyone has a voluntary right to work. But when you go to work for a company and express your concerns about fairness, compliance and anti-predetory lending directly to the boss and then have them hire in new management that is forcing you do do something that you know is not right then your position has now been comprimised. I dont know about you but I have never taken a job just to take a job but to help build the company. What kind of an analagy is gambeling? Did you pay FNLC to hire you? Do you feel that accepting a job with that company was a gamble?
This may be an industry wide problem but FNLC is taking a hit harder than most and they deserve it. You reap what you sow and many of us have been waiting for this day before there were the major subprime problems due to the fact that we saw first hand what they were doing and got out.
The sales meetings were an embarrasment of AE's falling all over themsevles feeding us all a bunch of bull and ignoring our concerns while big T and his little minion orchastrated the show.
It is "too bad" that you have not worked for a good, reputable company that cares about its employees for then you would understsand the difference. As far as the fact that they are paying severence, they dont have a choice, see 8% is enough post.
You people are pathetic! If you think for one moment that they enjoy watching a company they built fall apart and having to layoff hundreds of people you are sadly mistaken. I want to Thank FNLC for everything they have done for me including the sevrance now I have time to find a job and move on. Thank you FNLC!!!
Oh boo dryline..you and toobad need to stop kissing the rear end of the henschels......
If you need to thank anyone, it is the US goverment for creating the WARN act.
It is the ONLY reason why you received the 60 days in pay and benefits; otherwise you would have gotten zero, nothing, nada, zilch
Toobad, go wash your nose...it is so brown and stinky, it is disgusting.
"This may be an industry wide problem but FNLC is taking a hit harder than most" I believe you are misrepresenting the facts. Almost 100 subprime lrnfrtd have gone under to date but First NLC is still in business. The company is taking all the right steps to make it through this difficult period in the industry trying to keep as many employees employed as possible.
To anon4this: You imply that you've worked for the company for quite some time. If you were so unhappy with the way management was handling the company, you should have resigned years ago and let someone who appreciated the company have your position.
The only reason First NLC is still in business is because they take advantage of employees. Reassuring everyone that "everything will be OK, it's a tough time in the industry, we'll get through it, DO WHAT IS REQUIRED, blah blah blah....."
Little do these people now they're only being kept around to clean up the mess and consolidate everything for the next phase of the shut down. First NLC is using people for their own gain after fooling them in to thinking they're going to survive this mess. Why don't you just admit it?
Why did I hang around so long? You should know this one if you're as smart as you think you are. The sub prime circle is a small one. Everybody knows everyone. People talk. First NLC likes to punish people who talk to the competition. Most of us had real bills to pay. We couldn't rely on the company expense accounts to pay our bills while we risk losing our jobs to find another.
I don't know I am even bothering to tell you all of this. You're just like Walsh, Larin, Loney, Erblat and the Henschel's. You're probably one of the peple I just mentioned.
You live in a different world that has no grasp of human values. You'll never get it.
People have free will and the right to choose. No one takes advantage of anyone. I don't know how you can even make the statement.
No one forced you to do anything. You choose. Cannot believe you are so bitter over something you chose to do. Again no one put a gun to your head and forced you to work for First NLC.
If the company was making money and our future looked great, I bet you still would complaining about something.
Every company has its problems. One has to ask himself if he is there to make a difference and what type of difference he is there to make.
Some of you need to get a life! What are you going to say when the company survives and the people who stayed are going to be rewarded for their efforts.
Toobad should explain why the company is late paying its employees. Today is Friday and employees are complaining about not getting paid. Check you accounts-no direct deposit!
NEW YORK (Reuters) - American Home Mortgage Investment Corp plans to close most operations on Friday and said nearly 7,000 employees will lose their jobs as the lender becomes one of the biggest casualties of the U.S. housing downturn.
Experts said it is likely the Melville, New York-based company will have to seek bankruptcy protection, and no later than Monday.
In a statement, American Home on Thursday night confirmed earlier reports that it was ceasing most operations. The company said its employee base will be reduced to about 750 workers, down from the 7,409 it reported at the end of last year. The terminations are effective Friday.
American Home originated $59 billion in loans last year, and mostly to people with better credit than risky subprime borrowers. About half of those mortgages were adjustable-rate loans, whose defining feature is an interest rate that can be adjusted upward.
"It is with great sadness that American Home has had to take this action which involves so many dedicated employees," Chief Executive Michael Strauss said in a statement.
Earlier on Thursday, Strauss declined to comment on whether the company would seek bankruptcy protection, which has become the last stop for a number of U.S. mortgage lenders in the past year. The company said it is maintaining its thrift and loan servicing businesses.
Ron Greenspan, a senior managing director at FTI Consulting in Los Angeles, said he has been in contact with American Home's creditors as they seek the best way to extract value from the lender's assets.
American Home's collapse shows how problems in the U.S. mortgage market are broadening, as credit quality issues begin to affect lenders focused on borrowers with decent credit, as opposed to "subprime" borrowers thought to be greater risks.
While American Home focused on borrowers considered good credit risks, it made many loans to people who could not document income or assets.
"Bankruptcy is the next logical step," said Steve DeLaney, analyst at JMP Securities in Atlanta.
American Home this week said that its own lenders cut it off, it faced escalating margin calls, and might liquidate assets. It also said it stopped taking loan applications.
The company offered many "Alt-A" mortgages, which fall between prime and subprime in quality, as well as adjustable-rate loans. Founded in 1987, the company said it had by 2006 become the 10th largest U.S. retail mortgage lender.
Dozens of mortgage lenders have shut their doors or tightened loan standards as housing prices slumped, borrowing costs rose, and delinquencies and defaults soared.
Other lenders that focused on higher-quality loans have also been challenged in the current downturn, including the largest, Countrywide Financial Corp.
Countrywide, which has seen an increase in problem loans among its more credit-worthy customers, issued an unusual statement on Thursday, saying its financial condition is "strong," and that is has nearly $50 billion of "highly reliable" short-term funding liquidity.
Maybe you might want to contact their employees and trade sob stories. Misery loves company.
Where is the love? Good, bad or indifferent, no one can deny that Neal and Jeff are trying to save their company from the same faith as Acredited, American Home and all the others that are no longer in business.
It is a well known fact that Neal and Jeff do not need the money. They do it because they love what they do and want to save their company.
There are very good people working there and blaming the company for the subprime market ills is just not fair to them.
I hope the company makes it. I did enjoyed my time while I worked there. FNLC is far from being the perfect company but it is not the worst either.
Peace out.
toobad says...
People have free will and the right to choose. No one takes advantage of anyone. I don't know how you can even make the statement.
Bullshit. You lay off people to save money and continue to draw your salary. You pressure other employees to take up the slack and keep it running so you can keep your paycheck. Tell me how fooling your staff in to working 12 hour days and pieces of their weekends only to be laid off at a later date is not taking advantage?
No one forced you to do anything. You choose. Cannot believe you are so bitter over something you chose to do. Again no one put a gun to your head and forced you to work for First NLC.
Bullshit, see today’s newest topic here - http://lastnlc.blogspot.com/
Yes the admin is as sharp as a knife and she is talking about you and your type of thinking. Read it, you may learn something.
If the company was making money and our future looked great, I bet you still would complaining about something.
Nope, but nice try. I was looking for work months before this company fell apart. I made plans to never work for anything that resembles this company’s management style.
It's too bad most of your valuable employees didn't do the same. Now they're out of work. Thank god for the WARN act. Otherwise they'd be bankrupt or homeless as well.
Every company has its problems. One has to ask himself if he is there to make a difference and what type of difference he is there to make.
Why don’t you ask the employees that you pressured to work 12 hour days and weekends if it was worth it to try to make a difference?
While management was out expensing $59 steak dinner's on the company and entertaining regionals and AE's your real workforce was busy trying to keep their jobs and take up the slack left over when you did the first round of layoffs.
Some of you need to get a life! What are you going to say when the company survives and the people who stayed are going to be rewarded for their efforts.
We all know this company is not going to be profitable again for a long time. Even if this company were guaranteed to be successful tomorrow you know damn well none of the people who were sacrificed would be invited back.
If people choose to work 12 hours days and on the weekends that is their choice. Not all people believe the same as you. Some people want to see this company survive and they appreciate everything management is doing to try to save jobs.
Account Executives are the people who bring in the business to support this company and your paycheck. Without sales no one gets paid. You begrudge them a dinner on the company. Are you jealous because the company did not invite you out for a free meal.
If people choose to work 12 hours days and on the weekends that is their choice.
So are you saying there would have been zero retribution towards the employee's who declined to take over the work that management created by laying off the existing employees to phase out each ops center? (watch out Anaheim and what's left of retail).
Answer carefully, because if you support your claim there will be a hell storm of people calling you a liar.
Account Executives are the people who bring in the business to support this company and your paycheck.
You're right for once.
Without sales no one gets paid. You begrudge them a dinner on the company. Are you jealous because the company did not invite you out for a free meal.
Don’t be ridiculous, I'm not jealous at all. I've enjoyed my share of expensive meals and perks on the company over the years.
As a matter of fact I recall a memo regarding our expense accounts being revised in 2005 (well for most of the company least).
Double standards are funny aren’t they?
But anyway the point is I don’t think it's appropriate to brag about a $600 dinner bill and how fantastic the meal and drinks were in front of the processors and underwriters when they are being coerced in to taking over someone else’s unfinished files because management wanted to cut operating costs to maintain their own paychecks.
Was that clear enough for you? Or should I write it out so a sixth grader can understand it?
Oh yeah, one more thing.
Regarding your earlier (copy and paste) “NEW YORK (Reuters) - American Home Mortgage Investment Corp” post.
One of the first thing’s you learn in a management role is to stick to the topic at hand. We are talking about First NLC not AHM.N, not some other company. Remember that and you just might succeed in your next endeavor as a real manager.
If you had been looking for months before the company feel apart and your "doing fine working solo", why have you not let the past go? Why are you still angry? Are you really doing fine?
The reason the article was posted was to prove a point that 7000 employees from this company were laid off today. Do you really think anyone enjoys laying off people? Do you really think the management at First NLC wants to lay people off? A company should do everything in its power to survive and that is what First NLC is currently attempting to do.
You must have believed in the company or you would not have stuck around so long.
Toobad, your ramblings offer perfect examples of why so many people are disgusted with FNLC's actions over the past few months.
Save all of your nonsense for the corporate newsletter.
Post a Comment