Items Tagged with 'New Century Financial Corp.'

ARTICLES

  • Fremont Sells Servicing Rights Back to Carrington Affiliate

    Fremont General Corporation said late Thursday that it will sell servicing rights on $1.9 billion in mortgage loans -- 13 percent of its existing servicing portfolio -- back to an affiliate of private equity firm Carrington Capital Management, as the troubled thrift looks to generate additional liquidity to fund its own operations.
    Read More
  • New Century Seeks Chapter 11 Plan Extension

    In a court filing Friday, former subprime giant New Century Financial Corp. said it is seeking an extension of a liquidation plan under its Chapter 11 bankruptcy. The Wall Street Journal reported Wednesday that the failed lender is working in concert with a committee of debtors and wants to extend the plan filing deadline until January 28. From the story:
    Read More
  • Mortgage Market Roundup: A Slippery Slope

    Caution, Slippery Slope Ahead: The biggest story of this week broke today, regarding the Treasury Department's efforts to establish a widespread bailout of troubled subprime borrowers -- an effort that is allegedly going to be inked before the end of this year.
    Read More
  • Game Over: New Century Won't Be Bought

    News broke late yesterday that New Century will shutter the rest of its business, laying off the remaining 2,000 employees it had been keeping in hopes of finding a buyer. Bloomberg reported yesterday that company officials finally conceded what I'd suspected all along -- that nobody wanted to touch New Century, even with a 10-foot stick.
    Read More
  • BK Court Approves DIP Financing for New Century

    New Century Financial Corporation announced today that the U.S. Bankruptcy Court for the District of Delaware has approved a motion permitting the Company, on an interim basis, to access up to $50 million of the $150 million debtor-in-possession (DIP) financing arranged for the Company by The CIT Group and Greenwich Capital Financial Products, Inc. The Court also approved New Century's other "first day" motions that will facilitate the Company's operations as it pursues the sale of its assets and operations through the chapter 11 process.
    Read More
  • New Century Bankrupt; Will Sell Servicing Platform For $139 Million

    New Century Financial Corporation announced this morning that it had filed a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code. As part of the widely-expected move, the company said it will layoff 52 percent of its workforce -- roughly 3,200 employees -- effective immediately. In conjunction with the filing, The CIT Group and Greenwich Capital Financial Products, Inc. have agreed to provide New Century up to $150 million in debtor-in-possession (DIP) financing, subject to court approval. The financing provides New Century with a $50 million commitment level at closing with the potential to increase the commitment to $150 million. The DIP financing is expected to provide New Century with funding to facilitate the chapter 11 process.
    Read More
  • Big Board Pulls New Century; Trading Halted

    New Century Financial Corporation (NYSE: NEW) said today that the New York Stock Exchange has halted trading of its stock, including both common and preferred stock. Saying that the NYSE Board had determined that New Century's stock was "no longer suitable for continued listing on the NYSE and will be suspended immediately," the company said the exchange's decision was driven by the company's recent filings with the Securities and Exchange Commission.
    Read More
  • New Century Stops Funding Loans; Liquidity 'Gone'

    New Century Financial Corporation (NYSE:NEW) confirmed yesterday that it has ceased funding new mortgage loans, as the troubled lender faces a liquidity crisis that may force the third largest subprime originator into bankruptcy. In a press statement, New Century said that one of its short-term credit providers had forced a full buyback of all loans funded by that creditor, forcing the company to buy back $710 million of its loans. One of the company's other creditors -- it would not name who, although some industry sources have suggested Morgan Stanley -- stepped in to fund the buyback, as well as providing New Century with an additional $265 million in short-term financing.
    Read More
  • New Century Faces Claims of Securities Fraud

    Potential liabilities continue to mount for troubled subprime mortgage banker New Century Financial Corporation today, after announcing last week that it had failed to properly account for the impact of loan repurchases. Housing Wire has learned that at least seven law firms in four different states are currently seeking to gain class action status for claims of securities fraud against New Century, as a result of the company's pending income restatements and resulting stock tumble. The financial implications of any pending class action suit are as of yet unclear, as none of the existing classes have been certified by the respective courts in which the motions were filed.
    Read More
  • Commentary: Subprime Hits a Wall

    Merrill Lynch gets cold feet: Unless you've been living under a rock, by far the biggest news of the week came in the form of an acknowledgement from the nation's third-largest originator, New Century Financial Corporation, that it had not only failed to properly account for the impact of loan repurchases on its financial statements throughout 2006, but had also grossly misestimated the volume of repurchases it would be faced with. It's pretty clear at this point that at least one investment firm is tightening the screws on subprime credit. That firm? Merrill Lynch, recently stung by bankruptcies at both Ownit and MLN USA, who were both funded through agreements with the Wall Street giant. Competing industry publication National Mortgage News first broke the story on Merrill's recent margin calls, and although Merrill did not provide New Century with a large warehouse line, it's clear that loan buybacks are becoming a growing problem for any subprime lender regardless of which Wall Street operation is providing the funding.
    Read More