Daily News and Information for the Mortgage Loan Originator
NovaStar Pink Slips 500
Friday, August 17, 2007
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KANSAS CITY, MO - NovaStar Financial, Inc. announced a reduction in workforce to align its organization and costs with an expected reduction in loan originations. The employment reduction affects approximately 500 persons, about 37 percent of the Company's workforce.
The company said, the layoffs will begin immediately and conclude during the fourth quarter of 2007.
Lance Anderson, President of NovaStar, commented: "During this challenging time in the housing market, NovaStar continues to honor its commitments while taking steps to adapt to industry-wide credit conditions and disruptions in capital markets. Our decision to reduce employment is painful but is required by market conditions and financial discipline. As we disclosed previously, the tighter guidelines and adjusted pricing we have adopted will reduce loan originations until the secondary market shows signs of normalizing. This reduction in force includes stepping back temporarily from pursuing new loans in the wholesale market, a decision we are also seeing among some of our peer companies. For now, we believe this is the right thing to do economically. Our retail channel will be the dominant source of new loans in the coming months. We will follow through on the funding of loans already approved through the wholesale channel."
The reduction in workforce will affect NovaStar's headquarters in Kansas City and will lead to closing wholesale operation centers in California and Ohio.
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