Major home lender files for bankruptcy

New Century Financial Corp., once the nation's second-largest provider of home loans to high-risk borrowers, filed for bankruptcy protection on Monday, the victim of its own financial missteps as well as pressures felt by its rival lenders. New Century immediately fired 3,200 workers - more than half its work force - and said it intends to sell off its major assets. New Century was the latest so-called subprime lender to fall on hard times amid a spike in mortgage defaults caused by borrowers unable to make payments. Subprime loans target borrowers with low credit scores. The mortgages carry relatively high interest rates but can also offer low initial payments.

"New Century's failure raises the very real risk that the problems facing the subprime sector will spread into the broader mortgage market," said Octavio Marenzi, CEO of Celent, a Boston-based financial research and consulting firm. "Relatively lax lending standards were by no means limited to subprime lenders, and problems could easily spread to the broader banking sector," he said.

Like other subprime lenders, New Century profited during the real estate boom, when appreciation rates soared and equity protected most homebuyers from defaulting on their loans. Most could simply refinance or sell homes at a big enough profit to pay off mortgages and move on. Investment banks also jumped in, eager to buy loans from subprime lenders then slice them up into bond products to sell on Wall Street.

news.yahoo.com :

New Century was the largest independent U.S. provider of "subprime" mortgages, or home loans to people with poor credit histories. More than 30 rivals have sold or closed similar operations in the past year. The demise of New Century came less than two months after the company first disclosed problems with delinquent and defaulted loans. It stopped making loans last month, after having made nearly $60 billion in 2006. "We are only at the very beginning of the problems facing subprime," said Sanford C. Bernstein & Co. analyst Brad Hintz. "This liquidity crisis is continuing."

U.S. homeowner delinquencies and defaults surged after many subprime lenders eased their lending standards too far. Some of the lenders offered low initial rates, which later jumped beyond what customers could afford, or even made loans that customers could not afford in the first place.

Panel: Warming will end some species

news.yahoo.com :

From the micro to the macro, from plankton in the oceans to polar bears in the far north and seals in the far south, global warming has begun changing life on Earth. "Changes in climate are now affecting physical and biological systems on every continent," says a draft obtained by The Associated Press of a report on warming's impacts, to be issued by the Intergovernmental Panel on Climate Change (IPCC), the authoritative U.N. network of 2,000 scientists and more than 100 governments. In February the panel declared it "very likely" most global warming has been caused by manmade emissions of carbon dioxide and other greenhouse gases.

Animal and plant life in the Arctic and Antarctic is undergoing substantial change, scientists say. Rising sea levels elsewhere are damaging coastal wetlands. Warmer waters are bleaching and killing coral reefs, pushing marine species toward the poles, reducing fish populations in African lakes, research finds. "Hundreds of species have already changed their ranges, and ecosystems are being disrupted," said University of Michigan ecologist Rosina Bierbaum, former head of the U.S. IPCC delegation. "It is clear that a number of species are going to be lost."

The IPCC draft estimates that if temperatures rise approximately 2 to 4 degrees Fahrenheit more, one-third of species will be lost from their current range, either moved elsewhere or vanished.

(2007-04-04 12:48:53 SGT) [Env] Permalink

Main | Next day (Apr 4, 2007) »

Most popular blog postings on lowem.log :

1. Singapore MRT rail network length to double by 2020
2. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
3. Live spot gold price quotes chart on COMEX
4. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
5. AVG Anti-Virus Free Edition 2011 direct download link
6. Real-time live gold and silver price quotes chart on COMEX
7. Singapore electric vehicles : Government agencies EMA and LTA to study EV introduction
8. Book review : Shut Down by William Flynn

Featured articles on lowem.log :

1. Book review : Shut Down by William Flynn
2. Singapore electric cars testing starts with 9 electric vehicles
3. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
4. 2010 Honda Civic Hybrid preliminary specifications released
5. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
6. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
7. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
8. Singapore : Nuclear power not ruled out