Bank cuts 627 jobs.

BANK CUTS 627 JOBS. Popular Inc., owner of Puerto Rico's biggest bank, will close its sub-prime lending unit, a move that will cost the company US$39 million in charges and about 627 people their jobs, reports Bloomberg News (Jan. 11, 2007). The company, which runs Banco Popular de Puerto Rico, plans to shut its wholesale non-prime mortgage origination business early in the current quarter along with the wholesale broker, retail and call-center units, said a federal filing. "Certainly, our performance has not been up to our standards," said CEO Richard Carrion in the filing, adding that the bank tried to improve results during 2006. "Unfortunately those efforts proved to be insufficient." Late payments on sub-prime loans in the US rose during the third quarter to 12.56% of the total, the most since the first quarter of 2003, the US Mortgage Bankers Association said. Sub-prime mortgages are made to people with low incomes, a track record of missed payments or limited credit histories. They're often among the first to default when the economy weakens, interest rates rise or home price drop.