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People's Choice Home Loan files for Chapter 11

NEW YORK (Reuters) - People’s Choice Home Loan Inc., a California-based mortgage lender to people with poor credit histories, filed for Chapter 11 bankruptcy protection on Tuesday, according to court papers.

A woman stands at the front of her home in San Diego, March 15, 2007. People's Choice Home Loan Inc., a California-based mortgage lender to people with poor credit histories, filed for Chapter 11 bankruptcy protection on Tuesday, according to court papers. REUTERS/Mike Blake

The Irvine, California-based unit of People’s Choice Financial Corp., a real estate investment trust, became at least the fourth large U.S. subprime lender to seek protection from creditors in the last three months.

It listed more than $100 million of both assets and debts in its filing with the U.S. Bankruptcy Court for the Central District of California.

Many subprime lenders have struggled from rising delinquencies and defaults, and more than two dozen have quit the industry in the last year.

People’s Choice and its lawyers did not immediately return calls and e-mails seeking comment.

Founded in 1999 by Neil Kornsweit, a former executive at subprime lender Aames Financial Corp., People’s Choice employs about 1,150 people nationwide, according to its Web site.

The company has retail offices in four states and wholesale offices in eight, and offered its first public securitization in April 2004, the site said.

People's Choice listed Wachovia Corp. WB.N as its largest unsecured creditor, but didn't say what it owes the bank. Among other listed creditors are Residential Funding Corp., Credit Suisse CSGN.VX and Bear Stearns Mortgage Capital Corp.

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On March 14, People’s Choice Financial withdrew plans with U.S. securities regulators to register common stock, citing “various business and market reasons.”

Subprime mortgage lenders that recently sought Chapter 11 protection include Mortgage Lenders Network USA Inc., Ownit Mortgage Solutions Inc. and ResMae Mortgage Corp.

Others, such as Irvine-based New Century Financial Corp. NEWC.PK and Santa Monica, California's Fremont General Corp. FMT.N, have this month cut jobs or announced planned cuts.

For more on the subprime mortgage crisis, see <ID:nN16195443>

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