What a rough start to the week. New Century, the number three sub-prime lender in 2006 is being asked by its creditors to repurchase bad loans. The company says it would cost them more than the cash they have. This will most likely mean declaring bankruptcy for this company. Trading on its shares have been halted!
The irony is that this revelation has put a damper in the stock market and boosted the bond market potentially resulting in a slight improvement in mortgage rates! Funny if you ask me.
Stocks Pause on Subprime News: Financial News - Yahoo! Finance: “Trading in New Century shares remained halted with news pending, as it had been before the opening bell.”
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The paperwork has been filed
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