Industry News

WMC tightens lending guidelines, lays off 460

No more zero-down loans or credit for borrowers with low FICO scores

WMC Mortgage laid off 460 employees Thursday, and has stopped making zero-down loans or loans to borrowers with FICO scores below 600. A spokeswoman for WMC, Brandie Young, said the affected employees were given "non-working" 60-day layoff notices, meaning they were not to report to work today. The layoffs, which represented about 20 percent of WMC's workforce, were undertaken companywide, she said. "We've restructured ourselves to retain a stung position in the market, and feel these actions have done that for us," Young said. "We'll be able to keep our efficiencies and focus strong. There certainly will not be any adverse impact in service or funding times as a result." Analysts at UBS securities data recently projected losses of 14.81 percent on mortgage-backed securities issued by Morgan Stanley and backed by WMC loans. Young said she had no comment on UBS' projections for the BBB- class issue, MSAC 2006-WMC2. "Our guidelines change constantly," Young said of WMC's decisi...

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