Long-Rumored Merger of BNC & Aurora a Go

Lehman Brothers said Wednesday that it will merge its subprime and alternative-A mortgage units into a single business and trim 400 positions over the next 30 to 90 days.A year ago rumors began to surface that a merger between the two divisions -- BNC Mortgage, Irvine, Calif., and Aurora Loan Services of Denver -- was afoot, but the company denied it. BNC is a wholesale funder, Aurora both a wholesaler and a correspondent buyer. Lehman executive Thomas Wind will manage the combined company, and BNC chief executive Steven Skolnik will run the wholesale lending operation for subprime and alt-A products. Mr. Skolnik will remain in Irvine. The correspondent lending division will remain in Denver at the Aurora location. Mr. Wind noted that the residential lending unit's loan production is up quarter to quarter and added that the merger does not reflect an effort to cut back expenses. "We see a great opportunity to grow as others have cut back and consolidated," he said. Mr. Wind oversees residential lending for Lehman Brothers.