SEC Launches New Century Probe

The Securities and Exchange Commission has initiated a formal investigation of New Century Financial Corp., according to the subprime mortgage company, which is in bankruptcy.Previously known as one of the nation's largest subprime lenders, New Century disclosed the existence of the SEC investigation in a July 5 securities filing and said it is cooperating with the commission. An internal investigation by the Irvine, Calif.-based company earlier this year discovered accounting errors relating to its loan repurchase losses and residual interests in securitizations. New Century has warned that its financial statements for 2005 and 2006 should not be relied on. New Century also disclosed in the SEC filing that it completed the sale of its servicing assets and servicing platform to Carrington Capital LLC for $177.4 million, including $5 million that is being held in escrow to indemnify Carrington for any possible claims. The company can be found on the Web at http://www.ncen.com.