NovaStar Cuts 17% of Its Staff

Struggling subprime funder NovaStar Financial trimmed its work force by 17% -- 350 positions -- on Friday, citing the changing landscape of the mortgage industry.The nation's 16th-largest subprime lender said the layoffs will affect its wholesale group "and related functions," including staffers at its headquarters in Kansas City, Mo., and at operation centers in California and Ohio. Its loan servicing platform is not affected by the job cuts, it said. According to the Quarterly Data Report, NovaStar is the nation's 21st-largest subprime servicer, with $16.5 billion in receivables. Like many subprime lenders, NovaStar has tightened its underwriting guidelines and exception policies and raised coupon rates to improve margins. It estimates that the layoffs will cost it up to $3.1 million in related charges.