Fremont General Mortgage Tells ENTIRE Staff They Will Be Fired

Discussion in 'Wall St. News' started by ByLoSellHi, Mar 19, 2007.

  1. The entire staff?

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a33cSfIcD_zs&refer=home

    Fremont General Gives Mortgage Staff Two-Month Dismissal Notice

    By Bradley Keoun

    March 19 (Bloomberg) --
    Fremont General Corp., the California thrift trying to sell its home-lending business, told the unit's staff they may be dismissed in two months.

    Employees will receive pay and benefits through May 18 unless they take other jobs, Kyle Walker, chief executive officer of the Fremont Investment & Loan subsidiary, told employees on a March 16 conference call. Fremont posted a recording of the call on a toll-free playback line. Walker cited the ``uncertainty of this situation'' at Santa Monica, California-based Fremont.

    ``The company has aggressively been pursuing its options,'' Walker said. ``Such efforts continue, although the company cannot provide more definitive information today.''

    Fremont announced March 2 that it hired Credit Suisse Group to help sell the mortgage business after being cited by the Federal Deposit Insurance Corp. for making loans to ``subprime'' borrowers who couldn't pay them back. Workers were put on paid leave this month and told to check in on a day-by-day basis.

    California requires employers to give workers 60 days notice before ``a plant closing or mass layoff,'' according to the state Employment Development Department's Web site.

    Walker told the Fremont mortgage employees on the conference call they would receive a written notice confirming the termination date.

    ``This is a formality,'' he said. ``If your situation should change, we will notify you directly or through your local management team, so it's very important that you keep in contact with your management during this period.''

    Falling Shares

    Dan Hilley, a Fremont spokesman, didn't immediately return calls seeking comment.

    Fremont told workers March 7 ``five or six interested parties'' may be interested in an acquisition. Last week, Fremont's stock surged 11 percent after the company said Credit Suisse increased its credit line to $1 billion.

    The shares have fallen by half this year on concerns that bad loans in the U.S. subprime market would lead to losses and reduce the unit's worth to potential buyers. On Friday, Credit- Based Asset Servicing and Securitization LLC cut the price it would pay in a previously announced takeover of mortgage lender Fieldstone Investment Corp., based in Columbia, Maryland, citing ``severe deterioration of the market for subprime loans.''

    Accredited Home Lenders Holding Co., a rival lender based in San Diego whose shares have fallen more than 60 percent this year, said today it may lose its Nasdaq Stock Market listing because the company failed to file an annual report on time.

    Subprime loans, a term applied to some of the riskiest home mortgages, are made to borrowers with poor credit ratings or high debt burdens. Late payments and defaults on U.S. subprime loans rose to a four-year high in the fourth quarter, according to the Mortgage Bankers Association. More than two dozen mortgage lenders have closed or sold operations since the start of 2006, according to Bloomberg data.

    Walker thanked employees ``for being very professional during these difficult times.''

    Fremont shares fell 49 cents, or 5.5 percent, to $8.41 at 11:30 a.m. in New York Stock Exchange composite trading.