Aegis Cuts 'Substantial' Amount of Staff

The Cerberus-owned Aegis Mortgage Corp., Houston, once a top-ranked subprime funder, revealed Tuesday that it will terminate a "substantial number of its employees" effective immediately.On Monday it stopped originating loans through its only remaining channel, wholesale. Aegis has lending operations in 50 states and offices in 24. No employee head count was available, but sources say it once employed 5,000. The nondepository said it is maintaining its servicing business. (A month ago National Mortgage News reported that Aegis was trying to sell its servicing business.) Cerberus -- which also controls GMAC Mortgage -- is in the process of buying subprime giant Option One Mortgage Corp., Irvine, Calif., but there is speculation that the hedge fund may seek to renegotiate that transaction. In a statement, Aegis chief executive Dan Gilbert said, "The change in market conditions, coupled with the rapid decline in the secondary mortgage market, has forced Aegis to take this action, despite the best efforts of our management team and hard-working employees."