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Last Updated: Thursday, 17 January 2008, 20:46 GMT
Lehman to cut 1,300 mortgage jobs
For sale sign
Tight credit conditions have made things difficult for homeowners
Investment bank Lehman Brothers says it will cut 1,300 jobs as it scales back its US mortgage lending business.

The decision comes amid a slump in the US housing market and as banks report billions of dollars of losses related to investments in sub-prime mortgages.

It had already cut about 2,500 jobs last year after shutting its sub-prime mortgage unit that lent to borrowers with poor credit histories.

The bank will take a $40m charge as part of the plan.

"While it was necessary for us to structure our mortgage origination businesses in the US to reflect the change in industry dynamics, we deeply regret the impact this action has on our people," said Ted Janulis, global head of Mortgage Capital for Lehman Brothers.

The cuts will affect Lehman's Aurora Loan Services subsidiary, which will close three regional offices.

The US housing market is going through a severe slowdown, with a sharp rise in mortgage defaults.

The market boomed for years as mortgage companies offered sub-prime loans to customers with weak credit histories.

But many of those buyers are now struggling to pay their mortgages and are losing their homes.

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