Monday, March 24, 2008

SN Announces Layoffs

Posted By on Mon, Mar 24, 2008 at 3:17 PM

This just in from Security National VP Brian Morrissey:

Eureka -- Security National Servicing Corporation today (March 24) announced the layoff of 21 employees in their Eureka headquarters and a total of 31 employees companywide, due to a slow down in the mortgage loan servicing business.

"We are saddened to let go some very talented staff", said Brian Morrissey, Sr. Vice-President. "This difficult decision was necessary due to economic conditions not in our control and are designed to help SN Servicing weather these turbulent economic times. When mortgage lending activities pick back up, we hope to be able to expand our staff."

Security National is the flagship firm of Eureka businessman, philanthropist and political figure Rob Arkley. There's been much speculation that the firm has fallen on hard times of late, what with the implosion of the U.S. real estate market and the associated credit crunch, but since SNSC is a closely held firm hard numbers are difficult to come by.

In the last few months, the belt has been tightened at Arkley's newspaper, the Eureka Reporter. The paper has downgraded to a five-days-per-week printing schedule, decreased the size of its staff and moved to lower-quality newsprint.

We're expecting a call-back from Morrissey, and we'll update this post when we get it.

UPDATE: Morrissey said this afternoon that were all from the servicing side of the business -- buying and selling real estate-backed debt -- and were at least somewhat expected.

"About a year ago as we saw the market starting to get really turbulent, we started to cut back on our purchase of loans," he said. "And as loans go through their natural cycle -- being paid off, or foreclosed -- those loans go down. And as a result of that, we have less work to do."

In other words, Morrissey said that the company wasn't caught holding sheafs of nonperforming paper in quite the same way that others in its sector have been lately. He said that company certainly has suffered from the economic climate of late, but that it was prepared. "If it's a game of musical chairs -- we sat down early," he said.

There's been a credit crisis among major financial institutions lately -- no one wants to loan money, especially when the loans are backed by shaky mortgages that could go pop at any time. Morrissey admitted that this had hampered business of late, but said that the company is well positioned to hop back into gear once the crisis passes.

"When the economy improves, we expect to add back staff," he said. "And we're hoping to hire some of the people that we just let go. They're good people."

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