Florida Mortgage Lender Lays Off Employees

The meltdown in the nation’s subprime mortgage industry hit the Tampa Bay housing market hard Friday, as two subprime lenders announced nearly 400 layoffs in Tampa.

A third Florida mortgage lender, H&R Block Mortgage Corp., also announced 141 job cuts, but a spokesman said they were not tied to the subprime industry troubles. All told, the three companies announced 534 layoffs Friday.

At least one of the layoff announcements was expected. California-based Fremont Investment & Loan had announced that hundreds of Tampa employees would be let go in May. It formally notified the state Friday that 301 jobs would be cut from its Tampa operations by May 18.

The company has been battered by a surge of defaults on subprime Florida home loans. The loans are typically high-interest and made to people with poor credit.

First NLC Financial Services, a Deerfield Beach-based company, offered no explanation for its layoffs Friday. State records show it will lay off 92 people from its office on Frontage Road between now and May 31, but company executives did not return calls Friday. First NLC is a subsidiary of investment banking firm Friedman, Billings, Ramsey Group.

According to a recent regulatory filing, First NLC suffered an operating loss of $18 million last year. It attributed the loss to the increased frequency of early loan defaults and an increase in the severity of the defaults, regulatory documents show.

H&R Block Mortgage, a subsidiary of the Kansas City, Mo.-based tax preparation giant, offers both prime and subprime loans. Company spokesman Nick Iammartino said the company is shifting its prime Florida mortgage lending business from H&R Block Mortgage to its bank subsidiary, H&R Block Bank, so the company is discontinuing some of its H&R Block Mortgage operations.

SOURCE: The Tampa Tribune