Fannie Terminates New Century as Seller/Servicer

Fannie Mae has cut ties with ailing subprime lender New Century Financial Corp., informing the company that it can no longer sell loans to the government-sponsored enterprise or service its mortgages.New Century, which is expected to file for bankruptcy protection, disclosed the news March 20 in a filing with the Securities and Exchange Commission. The Irvine, Calif.-based wholesaler also said it has been hit with cease-and-desist orders from several states, including California, Florida, and New York. The C&Ds accuse the company of not funding loans after closing. (New Century has not funded a mortgage in at least two weeks.) All of its warehouse providers cut off credit to the company. It services about $40 billion in loans, according to the Quarterly Data Report. One investment adviser told MortgageWire that New Century has enough cash to last 60 days. Its stock was delisted by the New York Stock Exchange and now trades on the "pink sheets." The companies can be found online at http://www.fanniemae.com and http://www.ncen.com.