Industry News

Subprime mortgage lender to restate results for most of 2006

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Subprime lender New Century Financial Corp. will restate results for the first three quarters of 2006 because it failed to properly account for expected losses on bad loans it was forced to repurchase, officials said. New Century said it will postpone today's planned announcement of fourth-quarter and 2006 earnings while it corrects accounting errors. The company said early payment defaults and loan repurchases have intensified, and the company expects to report a loss for the fourth quarter. New Century -- which is organized as a real estate investment trust -- said the adjustments to its books are "non-cash in nature" and that the company had cash and liquidity in excess of $350 million as of Dec. 31. The lender said it would restate its earnings for the first three quarters of 2006 because it underestimated the number of loans it would be forced to repurchase due to early payment defaults. New Century said it also failed to discount the value of loans it did repurchase to reflect t...