Bankruptcy

New Century Terminates Freddie Mac Relationship; Bankruptcy Imminent 

Signaling that a widely-expected bankruptcy filing is imminent, besieged subprime lender New Century Financial said late Wednesday that it has voluntarily terminated its eligibility to originate and service Freddie Mac-sponsored loans. As a result, the company will not be able to sell or service loans for Freddie Mac. The company had disclosed on March 20 that fellow GSE Fannie Mae had terminated its selling and servicing agreement with New Century. A source close to events taking place at the company told HW this morning that New Century officials decided to voluntarily terminate the agreement with Freddie. “If they didn’t, Freddie would have,” said one source, on condition of anonymity. “It was just a matter of time.”