NEW YORK -- Lehman Brothers Holdings Wednesday said it is shutting down subprime mortgage unit BNC Mortgage Corp., affecting the jobs of 1,200 employees in 23 cities and resulting in a $25 million charge.

Lehman Brothers, a U.S. investment bank with an extensive mortgage business, said credit market conditions prompted it to slash its subprime resources and capacity. Lehman will continue to originate mortgages in the United States through its Aurora Loan Services LLC platform.

The bank said it will record $25 million in after-tax charges for severance, real estate and technology costs and write down goodwill associated with the unit, or $27 million.

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