IRVINE, Calif., March 9 (UPI) -- New Century Financial, the No. 2 U.S. subprime mortgage lender, may file for Chapter 11 bankruptcy protection, reports said Friday.
The Irvine, Calif., company appears nearly out of liquidity and has not been able to negotiate the financing and credit waivers it needs to stay in business, the CNBC cable network reported.
The network and The Wall Street Journal said New Century got some financing from one of its biggest creditors, investment bank Morgan Stanley.
But the company's mounting woes suggest it may be forced to file for bankruptcy protection from creditors if it cannot find a suitor or sell assets soon, the reports said.
A New Century spokeswoman would not comment on the possibility of a bankruptcy filing or asset sales.
The company, plagued by rising defaults on its subprime mortgage loans -- home loans made to borrowers with weak credit -- said Thursday it stopped accepting loan applications because some of its backers refused to provide access to financing.
