Irvine-based mortgage lender ECC Capital Corp. said Friday that it would eliminate 27% of its workforce, or more than 440 jobs, amid a cooling trend in the home loan business.
ECC's main subsidiary, Encore Credit Corp., which funds loans through independent mortgage brokers, will consolidate seven processing centers into three sites in Irvine, Downers Grove, Ill., and Glen Allen, Va., the company said.
Encore Credit created ECC as a real estate investment trust, or REIT, that went public at $6.75 a share in February. ECC's stock hit a high of $6.85 a share that month but has since tumbled as rising short-term interest rates and brutal competition have roughed up the home loan business; it closed up a penny Friday at $2.37.
Shabi Asghar, ECC's co-chief executive and president, said the company regretted having to lay off so many employees but called the step "necessary in order to remain competitive and to improve the operating results of our mortgage banking operations."
ECC specializes in "sub-prime" loans to people with checkered credit, erratic employment or other issues that prevent them from getting traditional loans.
Separately, Roth Capital Partners analyst Richard A. Eckert downgraded his rating to "sell" from "neutral" on another Orange County mortgage REIT, Newport Beach-based Impac Mortgage Holdings Inc.
Impac on Thursday had declared a dividend of 20 cents a share, down from 45 cents in the third quarter.