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New Century Financial Chapter 11 Bankruptcy Protection
Subprime mortgage lender New Century Financial Corp. filed Monday for Chapter 11 bankruptcy protection, and said it would fire 3,200 workers, or 54 percent of its work force, to better position the company for a possible sale.
Once the second-largest provider of subprime mortgages in the U.S. based on loan volume, New Century was the latest lender to fall on hard times amid a spike in mortgage defaults caused by borrowers unable to make payments.
More than two dozen subprime lenders have shut down in recent months and others are scrambling to stay in business.
New Century said it has agreed to sell its loan servicing business to Carrington Capital Management LLC and its affiliate for about $139 million, subject to the approval of the bankruptcy court.
"The decision to pursue the sale of the company's assets and operations through the bankruptcy process was a difficult but appropriate decision for our board to make," president and chief executive Brad A. Morrice said in a statement.
"This was a very hard step for me personally and clearly not the outcome I would have preferred," Morrice said.
Ahorre May 12, 2007 01:53 AM | About Mortgage and Home Loans | Business | Franchise Business