Housing.com News, Analysis & Opinion: Mortgage & Loan: New Century Files For Bankruptcy

New Century Financial filed for bankruptcy protection on Monday and said it would lay off 3,200 people, or half its workforce, immediately as the second-largest subprime mortgage lender succumbed to a credit crunch in the sector.
New Century shares fell 4.7% to $1.01 during afternoon trading on Monday. The stock was trading above $30 at the start of 2007.
The company filed for Chapter 11 bankruptcy in Delaware.

Reuters has a timeline of New Century and subprime history in general. Here's an interesting nugget:

1998 - Rising delinquencies and the aftermath of the Russian debt crisis spook investors in subprime, but U.S. Bancorp likes the business enough to strike a strategic alliance with New Century, buying $20 million of its preferred shares.

Boy, why don't we pay more attention to the cycles of history, eh? I like the UPI take on it best:

The company -- once a multibillion-dollar lender listed on the New York Stock Exchange and now trading on the over-the-counter pink sheets -- said its creditors included Countrywide Financial Corp., Bank of America Corp., Lehman Brothers Bank FSB, Residential Funding Corp. and Goldman Sachs Mortgage Co...The company, founded in 1995, went public two years later and was named to Fortune magazine's list of the 100 fastest-growing companies in 2003 and 2004.

From the top of the world to Chapter 11 in twelve years. It could be written off as a poignant metaphor for the housing industry as a whole if it wasn't for the very real 3200 people who are about to be looking for work.

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This certainly doesn't come as a particular surprise. From Marketwatch: New Century Financial filed for bankruptcy protection on Monday and said it would lay off 3,200 people, or half its workforce, immediately as the second-largest subprime mortgage lender succumbed to a credit crunch in the sector. New Century shares fell 4.7% to $1.01 during afternoon trading on Monday. The stock was trading above $30 at the start of 2007. The company filed for Chapter 11 bankruptcy in Delaware. Reuters has a timeline of New Century and subprime history in general. Here's an interesting nugget: 1998 - Rising delinquencies and the aftermath of the Russian debt crisis spook investors in subprime, but U.S. Bancorp likes the business enough to strike a strategic alliance with New Century, buying $20 million of its preferred shares. Boy, why don't we pay more attention to the cycles of history, eh? I like the UPI take on it best: The company -- once a multibillion-dollar lender listed on the New York Stock Exchange and now trading on the over-the-counter pink sheets -- said its creditors included Countrywide Financial Corp., Bank of America Corp., Lehman Brothers Bank FSB, Residential Funding Corp. and Goldman Sachs Mortgage Co...The company, founded in 1995, went public two years later and was named to Fortune magazine's list of the 100 fastest-growing companies in 2003 and 2004. From the top of the world to Chapter 11 in twelve years. It could be written off as a poignant metaphor for the housing industry as a whole if it wasn't for the very real 3200 people who are about to be looking for work.