Sub-prime lender Accredited gets loan

The struggling sub-prime mortgage industry was hit with more layoffs Tuesday, but at least one lender received an assist that could help it keep the lights on.

Accredited Home Lenders Holding Co. of San Diego said it had received a $200-million loan from Farallon Capital Management, a San Francisco-based hedge fund.

The loan gives Accredited, the 15th-largest sub-prime lender in 2006, a financial cushion -- allowing it to pay creditors and to keep making loans.

"It's a lifeline," said Richard Eckert, an analyst at Roth Capital Partners. "It allows them to continue doing business."

Eckert, however, said the company still needed more money -- perhaps another $200 million. Accredited officials did not return a call for comment.

Sub-prime lenders specialize in loans to people with spotty credit or irregular income. Rising defaults and shrinking lending margins have forced dozens of these firms to close or put themselves on the auction block.

Those that remain in business have stopped offering their highest-risk loans, such as no-money-down mortgages or loans in which borrowers don't have to document their income.

Wells Fargo & Co. -- by at least one measure the biggest player in the sector -- said Tuesday that it eliminated at least 444 positions in its sub-prime operations last month after tightening its lending standards.

The job cuts "are the result of the loan volume going down," said Teri Schrettenbrunner, a spokeswoman for Wells Fargo Home Mortgage.

The 444 jobs were cut at Wells' offices in North Carolina, Arizona and Northern California -- where 71 positions in Concord were eliminated Feb. 19, she said.

Small numbers of jobs may have been trimmed elsewhere, Schrettenbrunner said, but she added that the San Francisco-based company didn't release information on minor changes in employment.

Fewer than 444 people became unemployed because Wells rehired many of the affected workers in different jobs, Schrettenbrunner said, but she could not provide any figures.

Wells Fargo helped originate $83 billion in sub-prime loans last year, the most of any lender, according to Inside B & C Lending, a trade publication. Schrettenbrunner said that number was misleading. On most of the loans, she said, Wells Fargo partnered with Wall Street investment banks that took over the loans and the risk of any losses.