New Century Financial sells loan portfolio for less than 30 cents on the dollar New Century Financial sold a 170 million dollar loan portfolio for less than 30 cents on the dollar to Ellington Management Group. Ellington Management is a hedge fund and this will be part of a growing trend of hedge funds, buyout firms and other Wall street firms trying to buy up sub prime assets as the market continues to collapse. New Century Financial will be selling its loan servicing units later this month. Carrington Capital Management, another fund manager, in early April agreed to buy the unit for $133 million unless a rival tops its bid.

Labels: carringtoncapitalmanagement, ellingtonmanagementgroup, NewCenturyFinancialCorp

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New Century Financial to shutdown home lending unit New Century Financial is shutting down it's home lending unit (which it was shopping around for sale. Surprisingly no one seemed to think that jumping into the sub prime market was a good idea right now). The firings will take place tomorrow. This is on top of the 3,200 already let go. This means that New Century Financial will let go 70% of it's work force.


Related Article at Bloomberg
New Century Shuts Lending Unit as No Buyers Emerge (Update2)

Labels: Newcentury., NewCenturyFinancialCorp, Subprime, subprimeloans, subprimemortgagelending

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The Subprime Directive For all the talk of the minimal effect the sub prime defaults are going to have, it's pretty apparent that the "minimal effects" are going to be larger than anyone has expected. Let's just look at the current closings and layoffs

• Loancity closed on 3/22/07
  
• Countrywide's subprime mortage defaults for 2006 may exceed the company's highest on record.
  
• New Century lays off 54% of their workers (this company is headed for the dustbin)and files for Chapter 11
  
• Aegis Lending plans to shutter its Sacramento office
  
• People's Choice (another sub prime lender) files for chapter 11
  

The shake out in California continues. You can bet that you will hear about it hear first (or nearly first). New Century was one of the ones that we reported on very early on (when I got a few emails about the situation there).

Labels: aegislending, CAMortgageNews, countrywide, countrywidesubprime, NewCenturyFinancialCorp, Subprime, subprimemortgagecalifornia

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New Century Recieves C&D Well you heard here first but now it's official, Irvine based New Century has received a Cease and Deist order from the State of California and Fannie Mae will stop buying their loans.

It's apparent that the chicanery over at New Century has gone well beyond simply foreclosures on the sub prime market.

"The filing also said the company has received cease-and-desist orders from California. The state alleges that New Century illegally failed to fund mortgage loans after closing."

Someone is going to jail.

Labels: Corp, fraud, Mortgage, Newcentury., NewCenturyFinancialCorp

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Defaults begin sink companies To quote Queen, "Another bites the dust". This time the mortgage company going under is Irvine based sub prime provider, New Century Financial Corp. It's creditors have cut it off as the defaults in the continue to rise. What's more telling is the percentage of sub prime loans, and their marketshare have skyrocketed in the last three years, going from 6% of the market to 22% of the market. Foreclosures and defaults will have a ripple effect throughout the California housing market.

The so-called sub-prime lending industry that specializes in loans to risky borrowers has been tormented for months by soured loans, creating huge losses and forcing about three dozen large lenders to be sold to other companies, to file for bankruptcy protection or to close operations altogether.

On Monday, New Century announced that the Wall Street firms that supplied its funding had either cut off fresh capital or were poised to do so, leading some industry observers to say bankruptcy was likely. The company's stock plunged $1.55, or 48%, on Monday to $1.66 before the New York Stock Exchange halted trading.

Less than a year ago, New Century shares were worth nearly $52 each.

As New Century's stock sank, those of other sub-prime lenders suffered too. Santa Monica-based Fremont General Corp. fell $1.30, or 16%, to $6.73. The firm said last week that it would exit the business under pressure from regulators.

Homebuilder shares also stumbled on fears that they will have fewer customers. Hovnanian Enterprises Inc. fell 6% and Pulte Homes Inc. dropped nearly 5%.

This is likely affect other mortgage providers with less exposures and will lead to a much needed tightening of lending standards. This will exert a downward pressure on California homes in several ways. First of expect more distressed sales of homes, secondly expect fewer offers on your home for sale since their will be fewer buyers competing for it.

Labels: CA, California, Mortgage, NewCenturyFinancialCorp, Subprime, subprimemortgagecalifornia

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Mortgage Broker Shakedown continues The California mortgage broker market continues it's shakedown. I have gotten four email reports of brokers closing their doors. I can only guess where this all gonna shake out. Companies to watch Aegis & New Century apparently

Labels: aegislending, brokershakedown, NewCenturyFinancialCorp

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