| New Century can't issue mortgages
New Century Financial Corp., the nation's second-biggest subprime mortgage lender, was ordered to halt operations in its home state of California Tuesday, and Fannie Mae stopped buying the company's loans.
California told New Century to stop taking mortgage applications and turn over pending loans to other lenders, the Irvine, Calif.-based company said in a regulatory filing. The state accounted for 37 percent of New Century's loans in 2005, the most recent year for which data is available. New Century said similar orders came from Florida and Washington.
Fannie Mae, the biggest source of money for U.S. mortgages, served notice it will no longer buy New Century's loans, according to the filing. New Century must deal with the cutoffs after at least 10 other states said they want the company to halt operations, and the lender said Tuesday it expects to receive additional orders from more states.
New Century, Biggest Subprime Casualty, Goes Bankrupt (Update4)
April 2 (Bloomberg) -- 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 today. New Century plans to sell most of its assets within 45 days, said the Chapter 11 filing in federal court in Wilmington, Delaware. About 3,200 people, more than half the workforce at the Irvine, California-based company, will be 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.
Churchill Expands With Back-To-Back
PHOENIX-Thirteen years after launching Churchill Mortgage Corp., a mortgage veteran has bought the Arizona component from her California-based partner and then merged it with the commercial banking arm. As a result, Churchill Commercial Capital Inc. is now one of the top five commercial mortgage bankers in the state with a loan-servicing portfolio topping $500 million. According to Cynthia Hammond, president of Churchill Commercial Capital, the merger means her company now handles the money side of loan servicing as well underwriting. She co-founded Churchill Mortgage Corp.'s Arizona operation with help from the firm's owners in Southern California. As part of the agreement, the SoCal operation will continue, but under a different name. .
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