NovaStar Financial tried to fight the system by accepting subprime applications from mortgage brokers when nobody else would. Every day I asked if there was any news from NovaStar because I wanted to see if their plan worked. Today we finally got some news but it was not good news for NovaStar’s employees.
NovaStar Financial Inc , a struggling subprime mortgage lender, said on Friday it will cut about 500 employees, or 37 percent of its work force, to reflect an expected reduction in home loans. The Kansas City, Missouri-based company said the job cuts will begin immediately, and are expected to conclude in the fourth quarter. It expects to incur a pretax charge of $17 million to $21 million in the third quarter for the cuts.