NovaStar (KC, MO Lender) survival at risk as First American cuts jobs

[UpInArms]

Source: Reuters

NEW YORK (Reuters) - New fallout from the U.S. housing slump hit mortgage and real estate companies on Tuesday as subprime lender NovaStar Financial Inc (NFI.N) and title insurer First American Corp (FAF.N) announced job cuts and NovaStar's auditor expressed doubt the company will survive.

NovaStar scrapped plans to raise $101.2 million in a rights offering, saying auditor Deloitte & Touche LLP wouldn't be associated with the plan unless NovaStar amended its financial disclosures to include a statement "about the uncertainty of NovaStar's ability to continue as a going concern."

Kansas City, Missouri-based NovaStar also said it will cut 275 of 400 retail lending jobs and 12 retail offices, and explore "strategic alternatives" for its servicing business, including a partnership with another company. It had stopped making home loans through brokers on August 17. NovaStar expects to employ 600 people overall after the cuts, down from 2,048 at year end. NovaStar shares fell as much as 19.8 percent.

"The probability of insolvency has increased significantly," wrote Scott Valentin, an analyst at Friedman, Billings Ramsey & Co. "An eventual liquidation of the company is highly probable."

Read more: http://news.yahoo.com/s/nm/20070904/bs_nm/mortgages_slump_corrected_dc

[whistle]

1. Will the Federal Reserve give them a $110 billion bailout also?

[kineneb]

2. guess we should dust off that Queen song

it seems to be the theme of the season:

"Another one bites the dust
Another one bites the dust
And another one gone, and another one gone
Another one bites the dust
Hey, I'm gonna get you too
Another one bites the dust"

...wondering how many more will bite it before this is all over?