Barclays, New Century Reach Agreement
In a filing with the Securities and Exchange Commission late Thursday, embattled subprime lender New Century Financial said that it had reached a deal with Barclays Bank PLC releasing it from nearly $1 billion in repurchase claims associated with the credit provider. Under the terms of the deal, Barclays will assume all outstanding mortgage loans funded but not yet sold through its warehouse credit facility at New Century on an "as-is" basis, for a total of approximately $900 million in whole loans. The non-recourse nature of the deal is a likely precursor to similar deals with other warehouse lenders that have forced repurchases at New Century, analysts told Housing Wire, as the company appears to be moving closer towards a bankruptcy filing sometime next week. "New Century is essentially telling its creditors 'you can take your loans as is, or you can see what you get out of receivership in bankruptcy' at this point," said one industry insider, on HW's customary condition of anonymity. New Century noted in its filing that Barclays is assuming the loans "without any representations or warranties by the Company [sic] or its subsidiaries, and without any holdback by Barclays." New Century said that if future agreements provide its other creditors with better terms, the terms of the current deal would be amended to reflect terms similar to those received by other creditors. As part of the loan transfer, Barclays will also be placing servicing responsibilities with another organization, although Thursday's filing did not identify a servicer by name.