California, Fannie Mae Sever Ties With New Century

Law360, New York (March 21, 2007, 12:00 AM EDT) -- New Century Financial Corp.’s outlook grew dimmer on Tuesday when the embattled subprime mortgage lender said it was ordered to stop operations in its home state of California and Fannie Mae refused to purchase the company’s loans.

Teetering on the verge of bankruptcy, New Century said in a regulatory filing that California demanded the Irvine, Calif.-based company stop accepting mortgage applications and transfer pending loans to other lenders. California accounted for more than a third of New Century’s loans in 2005.

New Century received the state’s...
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