--- title: "Lehman's mortgage companies in the U.S. and the U.K." language: en canonical: https://dossiertwist.com/dossiers/lehman-brothers-holdings/mortgage-companies/ as_of: 2026-10-14 keywords: ["Lehman Brothers Holdings","LBHI","Repo 105","Valukas examiner report","Ernst & Young","Chapter 11","Lehman Brothers Inc.","SIPA liquidation","Lehman Brothers Treasury Co.","Lehman Brothers Bankhaus","Lehman Brothers International (Europe)","Plan Trust","Alvarez & Marsal","Richard Fuld","Aurora Loan Services","BNC Mortgage","JPMorgan Chase","Barclays Capital","American Express","Lehman Brothers Special Financing"] --- # Lehman's mortgage companies in the U.S. and the U.K. **Question.** Which mortgage companies did Lehman own, and what happened to them after 2007? **Answer.** In 2005 Lehman owned its U.S. mortgage lenders BNC Mortgage and Aurora Loan Services through Lehman Brothers Bancorp and the savings bank Lehman Brothers Bank, FSB, later Aurora Bank FSB. It closed the subprime lender BNC in August 2007; after the bankruptcy LBHI agreed a settlement of intercompany claims with Aurora in 2010, subject to court and regulator approval. BNC and the securitisation company SASCO filed their own Chapter 11 cases, closed in 2020 and 2019. In the U.K. the lenders Southern Pacific Mortgage and Preferred Mortgages, listed under Lehman in 2005, have had other registered controlling shareholders since 2018, Mable Commercial Funding Limited and then Southern Pacific Holdings Limited; Companies House does not show whether these belong to the Lehman group. ## The U.S. mortgage companies - Analysis: In LBHI's 2005 subsidiary list Lehman Brothers Bancorp Inc. is the parent of Lehman Brothers Bank, FSB, under which are the mortgage companies Aurora Loan Services LLC and BNC Mortgage Inc. A 2010 settlement agreement filed with the SEC describes the savings bank, by then Aurora Bank FSB, as supervised by the Office of Thrift Supervision and wholly owned by Lehman Brothers Bancorp, whose sole shareholder was LBHI; Aurora Loan Services was wholly owned by the bank, and Aurora was part of LBHI's consolidated tax group. [src-047] [src-096] - Analysis: On August 22, 2007 Lehman announced that market conditions required a substantial reduction of its subprime capacity and that it was closing BNC Mortgage LLC, affecting about 1,200 employees in 23 locations, with after-tax charges of about $25 million and a goodwill write-down of about $27 million; it continued to originate U.S. mortgages through Aurora Loan Services. [src-048] ## Aurora after the bankruptcy - Analysis: According to the 2010 settlement agreement, LBHI and named subsidiaries had intercompany arrangements with Aurora Bank and Aurora Loan Services covering tax allocation, loan purchases and servicing. In February 2009 LBHI, through Lehman Brothers Bancorp, contributed servicing rights valued at about $88.5 million to Aurora's capital; the parties later acknowledged that the valuation was overstated, and Aurora and Aurora Loan Services filed claims against LBHI for the shortfall and lost fees. Under the settlement, subject to court and regulator approval, LBHI or named subsidiaries were to pay Aurora $577 million less $100 million already contributed in December 2009 and transfer further assets, and LBHI was to pay $218.9 million to settle tax-allocation obligations; a form of capital maintenance agreement attached to the settlement would commit LBHI and Lehman Brothers Bancorp to the Office of Thrift Supervision to maintain the bank's capital. [src-096] - Analysis: A federal court publication lists Aurora Bank, Aurora Loan Services, Lehman Brothers Bank and LBHI among many defendants in Cabusas v. Mortgage Electronic Systems, Inc., a 2012 case in the Northern District of California, together with Lehman mortgage securitisation trusts. The published listing gives neither the claims nor the outcome. [src-129] ## Mortgage companies in Chapter 11 - Analysis: BNC Mortgage LLC filed its own Chapter 11 petition on January 9, 2009, jointly administered with LBHI's case; it was closed by final decree on May 4, 2020. Structured Asset Securities Corporation (SASCO), a Delaware securitisation company, filed on February 9, 2009 after its board approved the filing on January 30; William Fox certified the resolutions as its chief financial officer, and the filing names LBHI as its parent. SASCO's case was closed by final decree on February 11, 2019. [src-029] [src-040] [src-061] ## The U.K. mortgage lenders - Analysis: Companies House records a parallel sequence of controlling shareholders for the two U.K. lenders in LBHI's 2005 list. Southern Pacific Mortgage Limited was controlled by Resetfan Limited and Preferred Mortgages Limited by Preferred Group Limited from April 6, 2016, when such reporting began, until February 22, 2018; both were then controlled by Mable Commercial Funding Limited until August 9, 2024, and since then by Southern Pacific Holdings Limited. The register does not say who owns these later parent companies or whether they belong to the Lehman group. [src-089] [src-114] - Analysis: The GLEIF record for Southern Pacific Mortgage Limited (LEI 254900KU8XA8CBZZYK80) shows an active company in Birmingham whose LEI, first issued in 2018, has lapsed; for its parents the record links only to reporting exceptions, whose reasons are not in the retained copy. Companies House lists 41 officer appointments for Preferred Mortgages Limited, 38 of them ended; its three current directors were appointed in 2010 and 2024. [src-122] [src-119] ## Sources - [src-047] Exhibit 21.01 to LBHI's Form 10-K for the fiscal year ended November 30, 2005 (list of subsidiaries), U.S. Securities and Exchange Commission (EDGAR), 2006-02 - [src-096] Settlement agreement among LBHI, Aurora Bank FSB and others, Exhibit 99.1 (2010), U.S. Securities and Exchange Commission (EDGAR), 2010 - [src-048] Lehman Brothers press release on the closure of BNC Mortgage LLC, Exhibit 99.1, U.S. Securities and Exchange Commission (EDGAR), 2007-08-22 - [src-129] Court publication: Cabusas v. Mortgage Electronic Systems, Inc. (N.D. Cal., 12-3000), U.S. Government Publishing Office (GovInfo), 2012 - [src-029] Court record source · src-029 - [src-040] LBHI quarterly financial report as of June 30, 2025, Exhibit 99.1 to the Plan Trust Form 8-K, U.S. Securities and Exchange Commission (EDGAR), 2025-08-28 - [src-061] Court record source · src-061 - [src-089] Companies House: persons with significant control of SOUTHERN PACIFIC MORTGAGE LIMITED (03266119), Companies House (U.K. registrar of companies), 2026-10-14 - [src-114] Companies House: persons with significant control of PREFERRED MORTGAGES LIMITED (03137809), Companies House (U.K. registrar of companies), 2026-10-14 - [src-122] GLEIF LEI record 254900KU8XA8CBZZYK80 (Southern Pacific Mortgage Limited), Global Legal Entity Identifier Foundation, 2026-10-14 - [src-119] Corporate registry source · src-119