March 14, 2007 / 6:20 PM / 13 years ago

Barclays demands New Century buy back loans

NEW YORK (Reuters) - New Century Financial Corp. NEWC.PK, the largest independent U.S. subprime mortgage lender, said on Wednesday that Barclays Plc (BARC.L) has demanded that it immediately buy back about $900 million of mortgage loans.

The disclosure may move New Century closer to bankruptcy, something many analysts already expect.

New Century on Monday said it had less than $60 million of cash on hand. It has said lenders might force it to repay more than $8 billion it doesn’t have.

In a Wednesday filing with the U.S. Securities and Exchange Commission, New Century said Barclays on March 12 issued a notice of default under a repurchase agreement.

The Irvine, California-based subprime lender said a notice the following day purports to speed up its obligation to buy back all loans financed under the agreement, and end the agreement. It estimated that the repurchase obligation was about $900 million as of Monday.

Separately, New Century said it was reviewing the New York Stock Exchange’s decision to suspend its common stock listing, and is reviewing orders by several state regulators not to accept new loan applications. It said it intends to comply with the orders pending any appeal.

Subprime lenders make home loans to people with poor credit histories. The lenders have been battered by rising delinquencies and defaults, and demands from their own lenders to take back soured loans at a loss.

New Century shares fell 15 cents to 69.5 cents in afternoon over-the-counter trading.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below