Aames Investment to Close Offices, Trim Staff
Cutting costs in reaction to a tough mortgage market, Los Angeles-based sub-prime lender Aames Investment Corp. said Monday that it would close offices in Deerfield, Fla., and Parsippany, N.J., and eliminate 100 jobs in its wholesale lending division, which makes loans through mortgage brokers.
Aames, a specialist in higher-cost loans to borrowers with imperfect credit, also is changing its corporate structure so the parent company is no longer a real estate investment trust. REITs are required to pay at least 90% of their taxable earnings to stockholders as dividends, and Aames wants to retain its capital for internal growth.
The cuts and restructuring are expected to save the company $10 million a year, Aames said in filing its annual report with the Securities and Exchange Commission. It said it lost $6.2 million, or 10 cents a share, in 2005, contrasted with a profit of $41.8 million, or 68 cents, in 2004.
Aames shares rose 2 cents to $6.31 before the announcement.