Fannie Mae Stops Working With New Century

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It looks like New Century Financial Corp. has been officially cut off from Fannie Mae.  Which means that the company that underwrites 20 percent of new loans in the country will not  do business with New Century.

Is that Taps I hear in  the distance?

Fannie Mae, formally known as the Federal National Mortgage Association, notified New Century last week that it had allegedly violated the contract, according to documents filed with the Securities and Exchange Commission.

As a result, New Century and its subsidiaries can no longer sell mortgage loans directly to Fannie Mae or act as the primary servicer of any home loans for the company, according to the filing.

Fannie Mae finances one of every five home loans in the United States.

The move by Fannie Mae is the latest blow against Irvine-based New Century, which rode the housing boom to became the second-largest U.S. sub-prime mortgage lender by volume but now teeters on the brink of bankruptcy. via the BostonHerald.com.