The Morning Report
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Orange County-based mortgage lender New Century Financial Corp., one of the largest lenders focused on consumers with poor credit, filed for bankruptcy protection today and announced it was laying off 3,200 employees — about half of its staff.
The company has been deluged by demands from investors that it buy back loans in default.
Today’s Los Angeles Times story on the filing included this bit of context:
Its fall epitomizes the collapse of the sub-prime lending business, which made $1.3 trillion in higher-cost mortgages over the past two years to shaky borrowers. In recent months, forced sales and outright shutdowns of lenders have plagued the industry — woes that threaten to depress the entire housing market.
New Century had stopped making loans on March 9 after losing funding from Wall Street.