| LENDER FILES FOR CHAPTER 11
New Century Financial Corp., overwhelmed by rising defaults from borrowers with poor credit records, became the largest subprime mortgage lender ever to fail as it filed for bankruptcy Monday.
New Century plans to sell most of its assets within 45 days, according to the Chapter 11 filing in federal court in Wilmington, Del. About 3,200 people, more than half the work force at the Irvine, Calif.-based company, were fired.
New Century said it already agreed to sell its mortgage billing and collections unit to Carrington Capital Management LLC for $139 million.
The company rode the U.S. housing boom to become the largest independent mortgage lender to subprime borrowers, only to collapse as interest rates rose and home prices fell.
New Century's market value soared to more than $3.5 billion in December 2004, and last year it made about $60 billion in loans.
BNY Mortgage Company, Financial Freedom Executives Elected Co ...
WASHINGTON, D.C.— The Board of Directors of the National Reverse Mortgage Lenders Association has elected Joe DeMarkey of BNY Mortgage Company and Bart Johnson of Financial Freedom as Co-Chairs of the Association for the next 12 months.
Joe DeMarkey is Director of Corporate Development at BNY (an Everbank Company) with over 9 year's experience in the reverse mortgage industry. According to the U.S. Department of Housing and Urban Development, BNY Mortgage ranked fifth overall in the nation as a producer of federally insured reverse mortgages (i.e., Home Equity Conversion Mortgages). In addition to his current responsibilities, DeMarkey (who is based in Milford, Mass.) has played a pivotal role in helping grow BNY's reverse mortgage retail sales division.
Bart Johnson is President of Financial Freedom, a subsidiary of IndyMac Bank, FSB, based in Irvine, Calif.
Mary Holm: Smashing idea if you've got nerve
Q. There's more than one way to skin a cat, or respond to the Reserve Bank's raising the official cash rate. I have a mortgage, and use the revolving credit component to maximum advantage, putting as much of my available cash into the revolving credit facility as possible. I have a credit card, and use it for as many purchases as possible and pay it once a month from the revolving credit mortgage. Since we could all "take it to the bank" that the OCR (official cash rate) was going to rise, I did. I fixed $100,000 of the revolving credit mortgage for three years at 7.85 per cent and invested it. It's in a managed fund that returned 49 per cent last year and 19 per cent since inception. It looks like brain damage to tear your hair when there's the option of making better use of the credit available from the banks.
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