FirstPlus to Sell Affiliates, Close O.C. Center and Lay Off 3,000

After failing to find a buyer, beleaguered home equity lender FirstPlus Financial Group said Thursday that it will sell off several affiliates, fire 3,000 people and close a major marketing center in Orange County.

The Dallas-based company, one of several “sub-prime” lenders felled by the global credit crunch and disarray in the mortgage lending market, said it will move its direct-marketing operations from Mission Viejo to Dallas as part of the consolidation.

Two potential buyers have walked away from the troubled lender, which has seen its stock plummet more than 80% in about two months as its access to capital virtually dried up. FirstPlus, which uses Miami Dolphins quarterback Dan Marino to pitch loans of as much as 125% of a home’s value, said it’s selling its loan servicing business to Superior Bank FSB and that it has accepted an offer for its Britain-based business. The transactions are valued at a total of $130 million.

“This investment allows them to keep their doors open, but the fact of the matter is that no one wanted to acquire the whole company,” said Michael Abrahams, an analyst for Sutro & Co. “The whole issue is being driven by liquidity. They were running out of cash.”

Others in the industry, including the Money Store, Green Tree Financial and United Companies Financial, have been unable to avoid similar pitfalls and have been bought or put up for sale. FirstPlus stock closed at $4.63, up 63 cents a share, on the New York Stock Exchange.

The Orange County unit had about 1,300 employees, but it was not clear how many jobs would be eliminated or transferred. William Joiner, company president and chief financial officer of the unit, could not be reached for comment. FirstPlus executives in Texas did not return several phone calls.