THE Cheshire-based mortgage business of an American bank hit by the worldwide credit crunch is to close at the cost of around 100 jobs.
US bank Morgan Stanley said it was shutting its Advantage Home Loans (AHL) business in Ellesmere Port due to the “continued deterioration” of the mortgage business.
The niche lender, which provides UK mortgages for people with poor credit histories and other specialist products, employs around 160 people from its Ellesmere Port headquarters.
Last night, local MP Andrew Miller said he had learned of the closure minutes after it was announced and understood it to be “a direct result of the sub prime mortgage market in the USA”.
Mr Miller said: “I was not surprised, regrettably. It has been a victim of what is happening in America and the consequent slow- down over here.”
The Labour MP said he had spoken to a former employee at the Ellesmere Port company’s HQ who said many of those employed were sales people scattered across the country.
Morgan Stanley has suffered since the credit markets dried up last summer as crisis hit the sub-prime investment market, and has been forced to write off billions of dollars worth of assets.
The closure of AHL, which has a loan book worth about £1bn, is expected to take place within a matter of months.
A spokesman for Morgan Stanley said a “variety of options” had been explored before the decision was taken to close down AHL.
The spokesman declined to reveal how many AHL customers had defaulted on their loans, saying only the ratio was “minimal”.
AHL’s mortgages, the funds for which were provided by Morgan Stanley, will continue to be serviced by another third party firm.
The AHL business was bought by Morgan Stanley in 2005.
The UK job cuts are part of a total of 1,000 just announced by the bank, with the remainder taking place in the US as Morgan Stanley scales back its residential mortgage operations.
Anthony Meola, chief operating officer of the bank’s US residential business, said: “Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned.”
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