The new century will be the last for New Century Financial, one of the nations largest subprime lenders. The bankrupt lender has laid off 2,000 of its remaining employees after failing to find another company to acquire it.
New Century CEO Brad Morrice said the firm is in its last days of existence, and that only a skeleton staff will remain to close up shop and turn out the lights.
"This brings us to today, which is a day that I could never have imagined facing," Morrice told a conference call.
New Centurys collapse symbolizes the disaster besetting the subprime lending industry, which enticed less than creditworthy homebuyers with creative mortgages and low starter rates.
However, those low adjustable rates are now being adjusted sharply higher, making some barely affordable homes now clearly unaffordable. At the same time, with home sales turning sluggish, many strapped homeowners are unable to sell their property, forcing them into foreclosure.
New Century, which originated $60 billion in loans in 2006, could not find a buyer for the company as a whole, but may have better luck in spinning off its parts.
Carrington Capital Management has reportedly agreed to bid at least $139 million for the servicing operation. But at a time when other subprime lenders are desperately trying to sell off assets, New Century found selling the company was about as easy as selling one of the homes it had financed.
