Large Subprime Lender Stops Issuing Loans
New Century Financial Corp., one of the nation's biggest subprime mortgage lenders, may be headed for bankruptcy. Wall Street investment banks have forced the California-based company to stop issuing new mortgages as it comes under pressure from its own lenders.
New Century is the nation's second-largest mortgage lender to people with less-than-stellar credit. The company's retreat is just the latest sign of growing trouble in the sub-prime market. It has been badly hit by rising numbers of defaults by borrowers with poor credit histories.
The company received new financing from one of its biggest backers, Morgan Stanley, Thursday. But the markets are concerned that may not be enough to stave off a bankruptcy filing.
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