New Century Financial Corporation is the belief of real estate investments originating from mortgage lending in the United States through its subsidiary operations, the New Century Mortgage Corporation and Home123 Corporation.
The company was founded in 1995. In 2004, this was converted into the trust of real estate investing. In 2006, the company was second only to HSBC Finance in issuing subprime mortgages.
In the spring of 2007, New Century suffered financial difficulties, and its NYSE stock trading stopped. On April 2, 2007, he filed for Chapter 11 bankruptcy. In July 2010, three company officers agreed to pay $ 90 million in settlements and were barred from serving as director of a public company for five years.
Video New Century
History
Company establishment
The company was founded in 1995 by a trio of founding managers and founders in Option One Mortgage, including Brad Morrice, who became chief executive. It's headquartered in Irvine, California. Initially employed 50 people in 1996, when it started to originate and buy loans. From 1997 to 2004, stocks rose 561 percent.
In 2004 it was converted into the trust of real estate investments and listed on the New York Stock Exchange. That year came $ 42.2 billion in mortgages and its stocks hit a high of nearly $ 64 per share by the end of the year. In fiscal 2005, its net income was $ 417 million. The company had 35 regional operations centers by the end of 2005, with the remaining headquarters in Irvine, California. In 2005, 37 percent of its business was in California.
On September 30, 2006, New Century reported that it had $ 25.1 billion in total assets, with total liabilities of $ 23 billion. At the end of the year, he reported $ 350 in cash and liquidity. In 2006, the company was second only to HSBC Finance in releasing subprime mortgages, generating $ 51.6 billion in subprime loans. Subprime mortgage loans are made for borrowers with limited or bad credit history. With a higher failure rate than the main credit, subprime mortgage loans are priced on the basis of the risks borne by the lender. In marketing the company, the New Century Home123 Mortgage division involved Bob Vila as the advertising spokesman for several years. It also entered into a sponsorship deal with NASCAR, as the Official Mortgage Company of NASCAR and sponsored the Ganassi Racing Chip with the Felix Sabates team, both in the Cup and Busch series.
In 2007, New Century has become the largest independent subprime mortgages provider in the United States. On January 1, 2007, New Century has approximately 7,200 full-time employees and a market capitalization of $ 1.75 billion. On January 1, 2007, he was led by Brad Morrice as president and CEO. Frederic J. Forster, the main independent director, served as chairman.
Financial difficulties
Loans began to slow in the second half of 2006.
In the spring of 2007, New Century entered a "spiral of death". On March 8, it was announced that they would stop accepting loan applications. Four days later the stock trading on NYSE was halted.
On March 2, 2007, it was announced that it was the subject of two criminal investigations by the federal government, and that the KPMG auditor had concerns about the company's ability to remain a solvent. Over the next week, the company lost 78 of its share value.
In early March, it was reported that they failed to meet certain financial requirements of the lender.
While the issue of New Century became public news in February & amp; March 2007, primarily as a result of the withdrawal of more than half of the 11 warehouse lenders, (which funded the closing of New Century loans until they were securitized), mortgage insiders heard rumors of New Century's disappearance of some (wholesale/warehouse) as early as the end of the third quarter, 2006.
On March 8, 2007, New Century Financial Corporation announced that it was suspending new loans when seeking new funding. At the beginning of March 12, it was said that the financing had been severed from most of the creditors, or the most planned to do so, and warned that many of its loan obligations failed.
The New Century Financial Corporation also said that one of its financial supporters has demanded that the company repurchase a number of loans in accordance with the repurchase terms stated in the loan purchase agreement.
In a filing on 12 March 2007, it was said that its lender could demand $ 8.4 billion in unenforceable loan payments. It was announced that $ 8.4 billion in immediate liabilities, with the company deemed to be approaching bankruptcy, for not having the cash to do so.
On March 12, 2007, the New York Stock Exchange stopped trading of New Century Financial Corporation, removing the company. Earlier, the company's shares had fallen 89% on the month. However on March 13, 2007, the NYSE abolished the company and the following day its market capitalization was less than $ 55 million. New Century is now trading on pink sheets, where the stock is trading at $ 0.10 per share in 2007.
On March 13, 2007, the New Century Financial Corporation reported in its filing of a law that they have received a grand jury call from the US Attorney's Office for the Central District of California as well as a letter from the Securities and Exchange Commission notifying the company of the preliminary investigation. The filing states that the US Attorney's office indicates in a letter dated 28 February 2007 that it conducted a criminal investigation in connection with the trading of corporate securities as well as an accounting error regarding the company's allowance for loss of repurchase. Submission further states that the Securities and Exchange Commission has requested a meeting with the company to discuss the company's previous announcement that it will restate certain financial statements.
On March 14, 2018, it was reported that Barclays had sued New Century immediately repay $ 900 million of mortgage loans. Just a few days earlier, New Century said that the money was less than $ 60 million.
New Century Financial Corporation and Home123 Corporation received a stop and stop notice on March 14, 2007 from Connecticut Banking Commissioner Howard F. Pitkin, for failing to comply with the agreement. The day was also blocked from making loans in New Hampshire, arguing that it did not tell the circumstances of his financial difficulties. New Jersey did the same thing that day. New Century said it wanted to obey orders, pending an appeal. The company received stops and orders from the states of Connecticut, Maryland, Rhode Island and Tennessee on March 14 and 15, and on March 19, it was under the order in eight states, including Pennsylvania. California followed on March 16.
On March 20, 2007, the New Century Financial Corporation said that they can no longer sell mortgage loans to Fannie Mae or act as the principal lender of mortgage lending to government-sponsored companies. In a filing with the Securities and Exchange Commission, the New Century Financial Corporation said that Fannie Mae ended "to cause" a contract of sale and service with it citing alleged breach of contract and others.
Bankruptcy
On April 2, 2007, he filed for Chapter 11 bankruptcy. New Century Financial Corporation and its related entities filed a voluntary petition for assistance under Chapter 11 of the United States Bankruptcy Code at the United States Bankruptcy Court, Delaware District located in Wilmington, Delaware. Century Financial Corporation's new liabilities accounted for more than $ 100 million. New Century Financial Corporation also announced that it employs about 3,200 people, more than half the workforce, to be stopped.
At that time filing for bankruptcy, it has fired 3,200 employees, or 54% of its workforce, with plans to sell assets quickly in the next one and a half months. The Company earned $ 150 million from financing from CIT Group Inc. and Greenwich Capital so that it can continue to operate during the bankruptcy process. There are reportedly about 100,000 creditors.
On May 25, 2007 they submitted an 8-K form, a day after stating that they "... may be exaggerating 2005 earnings."
On June 8, 2007, New Century Financial warned that efforts to liquidate assets could be hindered if GE Capital was allowed to continue with plans to seize computers and other equipment leased to a bankrupt housing lender. GE Capital, arguing that New Century owed $ 8.7 million for rental equipment and could not continue paying the payment, asked the judge to raise the protection normally granted to companies in Chapter 11. That would allow the company, the General Electric unit, to retrieve the equipment, which includes computer servers, and chairs. New Century said that it would interfere with its efforts to stop operations and repay its creditors. New Century says "a lot of data and information" involving assets and business operations, including accounting information, stored on computers, or generated by them. New Century also said "it is very important for debtors to use equipment" so that the loan services business recently sold to Carrington Capital Management can continue to "operate as a viability." Carrington paid $ 188 million for his business.
In March 2008, during the liquidation of New Century Financial Corporation, a private company in Northern Illinois acquired only brand assets in bankruptcy. New Century Financial holds several brands including Home123. Brand Home123 was reintroduced to the market as a marketing and real estate technology company focused on bringing people, resources, and information together.
The New Century brand in 2008 is being positioned for sale.
Legal and settlement lawsuits
On March 26, 2008, a report not sealed by bankruptcy court judge Michael J. Missal outlines a number of "significant inappropriate and inappropriate practices related to loan origination, operations, accounting and financial reporting processes," and accused KPMG auditors of assisting the company hid the problem during 2005 and 2006.
On December 7, 2009, federal regulators sued three former New Century Financial Corp officials, accusing them of misleading corporate investors about the prospect of the company, as bad acts spreading in the mortgage industry began to be widely recognized.
In July 2010, three company officers agreed to pay $ 90 million in settlements and were barred from serving as director of a public company for five years.
On July 31, 2010, Los Angeles Times reported that settlements had been reached between the SEC, the plaintiffs represented the investor class, and the directors and officers of the New Century. The settlement of the SEC, involving actions taken by the SEC against three officers from New Century (Brad Morrice, Patti M. Dodge and David N. Kenneally), forbade them serve as directors of public corporations for five years, subject to fines and gains they. None of the defendants admitted any wrongdoing. New Century directors are not sued or banned by the SEC. On the same day, the SEC settlement was announced, New Century, and its directors and officials completed a class action lawsuit filed against them and the company. The same three officers listed above were the parties involved in the civil settlement, as did former director of New Century: co-founder Robert K. Cole, co-founder of Edward Gotschall, Fredrick J. Forster, Michael M Sachs, Harold A. Black, Donald E. Lange, Terrence P. Sandvik, Richard A. Zone, Marilyn A. Alexander, David Einhorn and William J. Popejoy.
Maps New Century
In popular culture
In The Big Short (2015), young investors Charlie Geller and Jamie Shipley have much risked the failure of subprime mortgage bonds, but had to endure a dreadful wait while a surge in defaults appeared to leave the housing market unaffected. But on April 2, 2007, they learned of the bankruptcy of New Century when watching CNN, and realized that the market collapse had begun in earnest.
See also
- the housing bubble of the United States
- Subprime mortgage 2007 financial crisis
- Financial All Countries
References
Source of the article : Wikipedia
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