Accredited Home Lenders goes BOOM!
As you most likely saw in the news, Accredited is laying off 62% of its workforce to continue operations, but not declaring bankruptcy...yet.
A friend of mine is a successful account exec in Washington and he filled me in on the meeting:
They terminated every employee except the top 10% of the Account Executives in the company, so he kept his job. For the time being, they will be paying the remaining employees a base salary, no commissions since they can't make loans. So remaining employees will be paid to sit on their ass until the market recovers or the company goes bankrupt, whichever comes first. Talk about stress?
If CFC fails, I think we may see the start of a system wide tailspin...
A friend of mine is a successful account exec in Washington and he filled me in on the meeting:
They terminated every employee except the top 10% of the Account Executives in the company, so he kept his job. For the time being, they will be paying the remaining employees a base salary, no commissions since they can't make loans. So remaining employees will be paid to sit on their ass until the market recovers or the company goes bankrupt, whichever comes first. Talk about stress?
If CFC fails, I think we may see the start of a system wide tailspin...
Comments
..
Lehman Brothers Shuts Down Subprime Unit, Fires 1,200 (Update2)
Lehman Brothers Holdings Inc., the biggest underwriter of U.S. bonds backed by mortgages, became the first firm on Wall Street to close its subprime-lending unit and said 1,200 employees will lose their jobs......
.......They're reducing costs at a time when there's no demand for the mortgages such lenders are producing,'' said Peter Sorrentino, who helps manage about $6.5 billion, including $20 million of Lehman shares, at Huntington Asset Management in Cincinnati. ``It's a relief for investors the announcement isn't about some poisonous debt that went sour on their balance sheet ...
..
At the risk of stating the obvious, methinks the mortgage industry is teetering on the verge of collapse. Secondary mortgage market investors are spooked and are not buying fantasy rated/valued MBS's anymore!
..
Just imagine the horror if those pink ponies every tired and our housing bubble force field collapsed!