New Century expects big loss in ending deal
Troubled sub-prime mortgage lender New Century Financial Corp. said Thursday that it expected a $46-million loss from the termination of a $900-million financing agreement with Barclays.
The termination resolves a dispute that arose last week, when New Century said the British bank demanded that it buy back all loans financed under the agreement.
Many analysts expect Irvine-based New Century to seek bankruptcy protection, and a forced buyback could have hastened the move.
In a Securities and Exchange Commission filing, New Century said Barclays agreed to release it from an obligation to buy back $900 million of mortgage loans in exchange for its agreement to release its rights to the loans.
New Century has hired Lazard Ltd. as its financial advisor, three creditors familiar with the situation said. Lazard declined to comment.
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