| Mortgage Lender New Century Seeks 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. .
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Mortgage lender New Century files for bankruptcy, plans to fire ...
LOS ANGELES (AP) -- Subprime mortgage lender New Century Financial Corp. filed today for Chapter 11 bankruptcy protection and said it intends to fire 3,200 workers - 54 percent of its work force - and sell the company's major assets. Once the second-largest provider of subprime mortgages in the U.S. based on loan volume, the company said the firings would better position the company for a possible sale. President and chief executive Brad A. Morrice said in a statement that New Century made the move after exploring a variety of ways that would have enabled it to continue its operations. "The Chapter 11 process provides the best means for selling our servicing and loan origination operations to financially sound parties," he said. "It is our hope that potential buyers will be in a stronger position than we are to employ many of our associates on an ongoing basis." New Century was the latest lender to fall on hard times amid a spike in mortgage defaults caused by borrowers unable to make payments.
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