Wave chief executive Colin Snowdon would not comment on the issue, but Merrill Lynch has confirmed that between 25 and 30 employees have been told that their jobs are at risk and under review.
Previous reports by Money Marketing estimated that the lender had cut its staff down to just 30, from 165. Merrill Lynch has denied that all the staff were at risk at this time.
Earlier this year it was reported Merrill Lynch were to make 200 redundancies across the two firms and cut 4,000 staff across its global operations.
In April 2008 Merrill Lynch axed its other sub prime mortgage brand, Mortgages PLC.
Wave, previously known as Freedom Lending, was sold to Merrill Lynch by Freedom Finance for £25m in 2006. It became Wave in June 2007. Earlier this year it stopped all new business but still services existing mortgages.