Aurora Bank to Shutter Correspondent Lending Unit

Aurora Bank FSB of Wilmington, Del., is closing its Missouri-based correspondent lending unit and laying off all 146 employees in its office there.

In a filing with the Missouri Department of Economic Development Thursday, Aurora said that it would shut down its Chesterfield office at the end of April. News of the pending layoffs was reported by the St. Louis Business Journal on Friday.

The $4.3 billion-asset lender began winding down its mortgage operations last month after it apparently was unable to find a suitable buyer for its origination business. It said in a notice on its web site that it is no longer accepting new loan registrations or locks, but that it will continue to service its current mortgage customers.

Aurora Bank is the former residential lending arm of Lehman Bros. The unit survived Lehman's 2008 bankruptcy, but both the bank and its Colorado-based servicing division, Aurora Loan Services, have been on the block per orders of the Lehman bankruptcy trustee.

National Mortgage News reported last week that Nationstar Mortgage in Lewisville, Texas, is the leading bidder for the $66 billion servicing unit.

Aurora Bank reported losing $83 million in 2011, compared with a profit of $150 million in 2010, according to data from the Federal Deposit Insurance Corp. At Dec. 31, residential loans made up roughly 77% of the company’s loan and lease portfolio and roughly 17% of its loans were at least 90 days past due, according to the FDIC.