Lehman Brothers, a leader in packaging subprime mortgages into securities, said yesterday that it would shut one of its home lending units and lay off 1,200 employees. The bank said it would take a $52 million charge to third-quarter earnings.

揕ehman Brothers announced today that market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space,?the firm said in a news release.

The announcement came on a day when Wall Street抯 concerns about the credit markets seemed to ease, at least for now; the three major markets all rose more than 1 percent. The rush to the safety of short-term Treasury markets also slowed.

As part of the effort to calm the markets, several banks, at the prompting of the Federal Reserve, borrowed $2 billion from the discount window.

Lehman抯 decision yesterday to close the lending unit, BNC Mortgage, made it the latest casualty in the subprime mortgage meltdown that started earlier this year and rippled into the broader credit markets starting in late July.

In recent weeks, several mortgage companies that specialized in risky home loans have stopped making loans, shut down or encountered other distress. Accredited Home Lenders, a subprime lender based in San Diego, stopped making loans through brokers and laid off 1,600 people, more than half of its staff.

The mortgage unit of HSBC Holdings announced yesterday that it would close an office in Carmel, Ind., and lay off about 600 workers; Delta Financial in Woodbury, N.Y., and Impac Mortgage Holdings, based in Irvine, Calif., both announced layoffs.

Amstar Financial Holdings said yesterday that its lending unit, Amstar Mortgage, had agreed to give up control of its branches to the Money Store.

In a deal reached earlier this year, Cerberus, which controls GMAC Financing, agreed to buy Option One, the mortgage subsidiary of H&R Block, the tax preparer. The widening problems in the mortgage market could jeopardize that acquisition.

Cerberus and H&R Block had no comment about the acquisition yesterday.

H&R Block said yesterday that it had tapped its bank credit lines twice for about $1 billion in the last week after its normal sources of cash began drying up.

In the last nine months, about 120 mortgage lenders have shut or declared bankruptcy, according to Lehman.

Yesterday, Quality Home Loans, a subprime lender in Agoura Hills, Calif., joined the list of those seeking bankruptcy protection.

Lehman Brothers is a major player in the mortgage market and a top player in underwriting securities backed by mortgages made to home buyers with weak, or subprime, credit histories. In 2006, the investment bank was the top underwriter for subprime mortgage-backed securities, with a roughly 11 percent market share, according to Inside Mortgage Finance, a trade publication.

Big Wall Street banks package subprime mortgages into securities and sell them to hedge funds and institutional investors looking for high-yielding assets. In the last 12 months, defaults on mortgages have surged as home prices have started falling. The worsening performance of the loans has squelched demand for mortgage-backed securities.

Executives at Lehman say that 85 percent to 90 percent of the loans written by BNC from 1999 until 2007 are either current or paid off, which is roughly in line with the industry average. Lehman has absorbed the losses of the remainder of the loans, these people say. The firm said earlier this year that 3 percent of its revenue in recent quarters derived from subprime-related businesses, or roughly $500 million in 2006.

Lehman took an ownership stake in BNC Mortgage in 2000 after helping to take the firm private. It fully acquired the business in 2004. Earlier this year, the bank announced that it would merge its Aurora Mortgage business and BNC, but that combination never came to pass.

Aurora, which focuses on so-called Alt-A loans, those made to borrowers with good credit, will continue to operate and may, over time, resume making subprime loans if the market for them revives, according to people briefed on the firm抯 plans.

Lehman said that all approved loans by BNC would be honored.