Most of HomeBanc's employees laid off

Company delays second-quarter results

By PÉRALTE C. PAUL
The Atlanta Journal-Constitution
Published on: 08/14/07

HomeBanc Corp. said it will not file its second quarter results Tuesday as expected and does not know when it will.

The embattled Atlanta-based mortgage company, which sought bankruptcy protection last week, was to have released those results Aug. 9 but was granted an extension to Tuesday by the U.S. Securities and Exchange Commission.

The company also will make an announcement later today about the status of its annual meeting, which had been scheduled for Aug. 30, said Carol Knies, HomeBanc's vice president of investor relations.

Further, Knies said that the company will have whittled itself down to a "skeletal" staff of fewer than 50 employees by the end of August.

Most of HomeBanc's roughly 1,000 employees were let go Friday, though some have been offered positions with Countrywide Financial Corp., which has agreed to acquire some of HomeBanc's assets.

Knies said she didn't know how many of those employees were offered jobs. Countrywide, based in Calabasas, Calif., has said it will not comment beyond a news release it issued last week that mentioned the planned hirings but did not give a specific number.

The HomeBanc staff that remains includes a "small number of executives, a small number in accounting and a small number in human resources," she said. The company will continue to service some of the loans in its portfolio, which means it will collect payments and provide other customer service functions on those mortgages and some of the remaining employees will be dedicated to that.

The company stopped originating mortgage loans last Monday because its credit lines were closed. It also said it was selling some of the assets of its HomeBanc Mortgage Corp. subsidiary to Countrywide Financial Corp.

HomeBanc sought Chapter 11 bankruptcy protection in Wilmington, Del., late Thursday.

Unlike employees who were laid off last year, those HomeBanc workers who lost their jobs on Friday received no severance, Knies said.

Their 401(k) retirement packages, managed by Merrill Lynch & Co., are unaffected, Knies said.

Employees can leave their retirement savings in their Merrill accounts, roll it over into an individual retirement account or into the 401(k) plans of a new employer if that's allowed, she said.

An emergency fund of about $25,000 created through voluntary, post-tax employee contributions was disbursed to employees through $20 grocery gift cards, Knies said.

That fund, originally established by employees to help workers who were in a financial pinch, is not part of HomeBanc's corporate assets, she said.