| New Century, Biggest Subprime Casualty, Goes Bankrupt (Update3)
April 2 (Bloomberg) -- New Century Financial Corp., overwhelmed by rising defaults from borrowers with poor credit records, became the largest subprime mortgage lender ever to fail as it filed for bankruptcy today. New Century plans to sell most of its assets within 45 days, said the Chapter 11 filing in federal court in Wilmington, Delaware. About 3,200 people, more than half the workforce at the Irvine, California-based company, will be fired. New Century said it already agreed to sell its mortgage billing and collections unit to Carrington Capital Management LLC for $139 million. The company rode the U.S. housing boom to become the largest independent mortgage lender to subprime borrowers, only to collapse as interest rates rose and home prices fell. New Century's market value soared to more than $3.5 billion in December 2004, and last year it made about $60 billion in loans.
New Century can't issue mortgages
New Century Financial Corp., the nation's second-biggest subprime mortgage lender, was ordered to halt operations in its home state of California Tuesday, and Fannie Mae stopped buying the company's loans.
California told New Century to stop taking mortgage applications and turn over pending loans to other lenders, the Irvine, Calif.-based company said in a regulatory filing. The state accounted for 37 percent of New Century's loans in 2005, the most recent year for which data is available. New Century said similar orders came from Florida and Washington.
Fannie Mae, the biggest source of money for U.S. mortgages, served notice it will no longer buy New Century's loans, according to the filing. New Century must deal with the cutoffs after at least 10 other states said they want the company to halt operations, and the lender said Tuesday it expects to receive additional orders from more states.
This is Perspecive for Saturday, April 7, 2007
Quotes from last week's newsmakers'I like the plan; it's not perfect but it shows a lot of work with consultants and we can build on it.' Tommy Barnes, Bibb County Board of Education member commenting on the initial plan to redistrict students. 'I won't come to the meetings if the plan remains as it is.' Bibb County Board of Education member Bob Nickels commenting on the redistricting plan.'I can't support this or any portion without some drastic changes.' Bibb County Board of Education member Gary Bechtel, commenting on the redistricting plan.'We hate that it happened at the same time. It was kinda strange.' Richard Anthony, manager of the former Gold's Gym in Warner Robins, commenting on changing its name to Edge Fitness at the same time Gold's Gym in Macon closed without notice.
|
