Subprime Hit: First Magnus fires 99% employees

Subprime Hit: First Magnus fires 99% employees

United States August 18, 2007

First Magnus Financial Corp, a national mortgage lender that is
suspending operations, says it has laid off 99% of its nearly 6,000
employees nationwide and closed all of its more than 300 offices.

According to a notice filed with the state yesterday, the Tucson-based
company that originated home loans and then sold bundled loans into
the secondary loan market expects to retain only about 60 employees.

First Magnus officials said a bankruptcy filing was possible.

On Thursday, First Magnus announced that it had stopped originating
new loans and was suspending operations.

Company officials said the lender was caught in the credit liquidity
crunch now causing a meltdown in the mortgage industry even though
First Mangus was not engaged in selling sub-prime mortgages that
sparked the crisis in recent months.

First Magnus, which calls itself one of the largest privately held
mortgage banking operations in the country, funded more than $30
billion in loans in 2006.

The company's retail outlets include Great Southwest Mortgage and
Charter Funding recently renamed First Magnus Home Loans.

WNS, India's second largest BPO, had said yesterday that First Magnus
had asked it to stop all operations for the company.