NovaStar Suspends Wholesale Again, Cuts Jobs

Subprime lender NovaStar Financial on Friday suspended wholesale production once again and cut 37% of its work force as the secondary market for all nonprime loans continued its severe downturn.Among subprime wholesalers, NovaStar ranks 17th, according to National Mortgage News and the Quarterly Data Report. In total, 500 workers lost their jobs. "This reduction in force includes stepping back temporarily from pursuing new loans in the wholesale market, a decision we are also seeing among some of our peer companies," company president Lance Anderson said in a statement. "For now, we believe this is the right thing to do economically. Our retail channel will be the dominant source of new loans in the coming months." A few weeks ago, the publicly traded real estate investment trust suspended production for a few days but then started up again.