What a ridiculous news day it has been. Amongst the announcement of Fremont pulling out of the subprime lending market (heck, residential mortgages altogether) New Century had some not-so-cheery news of its own. As reported in numerous places New Century is now facing a criminal probe from the U.S. Attorney’s office for its securities and accounting practices. It also faces losing some of its major institutional investors, who may use this new investigation as an easy excuse to back away from commitments to buy mortgage backed securities (MBS) from New Century. If that happens New Century would have an extremely difficult time continuing operations, said its auditors KPMG.
Calculated Risk has excellent coverage of both issues.Click to See the Latest Mortgage Rates»