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Politics & Money

New Century Sees Servicing Ops Go for 35 Percent Above Original Offer

Defunct subprime lender New Century Financial reported yesterday that hedge fund Carrington Capital Management LLC won its previously-announced auction for the Irvine, Calif.-based lender’s servicing operation. But here’s the really interesting part:

The new purchase price was reached following an auction involving multiple bidders, and represents an increase of approximately 35% from the initial $139 million offer made by Carrington, when the Company initially filed for chapter 11 protection on April 2, 2007.

Was Carrington intentionally low-balling in its first offer? (It sure looks like it now.) I’d have to see the MSRs on the books and a few other key financial metrics to get an idea of what this purchase price really means, but I can’t seem to locate any of this information. If I do, this post will be updated. And who else drove up the bidding price? Inquiring minds would love to know.

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