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New Century stops funding loans

Board member resigns, criminal investigation launched

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New Century Financial Corp. has stopped funding loans after at least five creditors stopped financing the company's operations, and another forced a repurchase of loans it originated. In a Securities and Exchange Commission filing Thursday, the California-based subprime lender said it has only been able to fund a portion of its loans this week because of problems with creditors. New Century announced last month that it would restate results for the first three quarters of 2006 because it failed to properly account for losses on bad loans it was forced to repurchase. In another SEC filing, New Century said it is the subject of a criminal investigation by the U.S. Attorney's Office for the Central District of California, which is looking into trading in New Century's securities and accounting errors related to the company's allowances for repurchase losses. New Century also disclosed that it was hit with a lawsuit Feb. 12 that seeks class action status to represent stockholders who a...