In an updated filing with the Securities and Exchange Commission this morning, New Century Financial (NYSE:NEW) disclosed that it faces nearly $8.4 billion in forced buybacks from nearly all of its credit providers, and that most had or were moving to terminate servicing agreements in place with the troubled mortgage banking operation. The vast majority of the company’s forced loan buybacks were the result of cross-default and cross-acceleration provisions associated with each of its credit lines, it said, and defaulting on one was enough to start a massive ‘cascading’ series of repurchase claims associated with all of the company’s creditors. Contrary to industry rumors, the lender will not begin funding new loans this week, saying in its filing that all of the company’s credit providers have ceased providing additional funds. New Century also said it does not have sufficient liquidity to cover the billions in repurchases it now faces, and numerous industry sources have told Housing Wire that the company will file bankruptcy in the next few days.

Morgan Stanley steps in; Citi plays fire starter? New Century also disclosed, as was widely rumored, that Morgan Stanley had stepped in to provide last-second financing that allowed the company to satisfy an initial round of $717 million in repurchases thrust upon it by Citigroup. The company also said that it expects to terminate its credit agreement with Citigroup as a result. Industry sources said, however, that the Citi accelerated claim forcing New Century to repurchase all loans funded through its Citi-associated credit facility was just the first in a “cascading” series of claims by the company’s short-term credit providers. “Citi moved first, and it looks like they’ll be the only ones getting at least something back,” said one industry source, on condition of anonymity. New Century disclosed that it had received notification of forced accelerated repurchases from Bank of America, CSFB, Goldman Sachs, IXIS and Morgan Stanley, and said that it expected to face aggregate repurchase claims of $8.4 billion from all of its credit providers. Losing servicing, too In its filing, New Century also disclosed that most of its lenders had notified the company that loans serviced by the troubled lender will be transferred elsewhere, dealing another blow to the company’s hopes for additional liquidity. Citi, which led the charge in accelerating repurchase claims, also cited a servicer ratings downgrade by both Moody’s Investors Service and Fitch Ratings as a breach of contractual servicing terms. Other banks appear to have followed suit, notifying New Century of their intent to transfer servicing within days of the move by Citigroup. “They’re done,” said an industry source, on the condition of anonymity. “You just don’t come back from something like this.”