"Laura Oberhelman said the real estate investment trust does not comment on market rumors."
Laura Oberhelman likes her job at New Century and wants to keep it. The thing is, a month from now, Laura won't have a job. She just doesn't know that yet.
Says Terry Wakefield, head of the Wakefield Co., a mortgage industry consulting firm: This is going to be a meltdown of unparalleled proportions. Billions will be lost.
BusinessWeek has learned that $700 million Carrington Capital and $3 billion Greenlight Capital may have gotten badly burned because of their intricate dealings with New Century Financial.
Magnetar Capital, a $4 billion hedge fund formed two years ago, may be on shaky ground, too. The question is, how many others may be suffering? This is a very opaque industry, so no one really knows, says economist Mark M. Zandi. My guess is that if you look at the top hedge funds, theyre bearing most of the risk.
Among hedge funds, Greenwich (Conn.)s Carrington seems particularly vulnerable. The fund was launched in 2003 with $25 million in seed money from New Century, which owns about a 35% equity stake. Not surprisingly, New Century is one of Carringtons biggest suppliers. Another major supplier is Fremont General (FMT), which says it plans to exit the subprime business.
Other hedge funds that have feasted on mortgage-backed securities will be hit hard if rating agencies start downgrading them, as is widely expected. That would be likely to send their values plummeting.
This is indeed a stress scenario, says Glenn T. Costello, co-head of the residential MBS Group at Fitch Ratings. Kevin Kanouff, who heads bond surveillance for Clayton Holdings, a consulting firm for institutional investors, adds that hedge funds are getting very nervous about their investments.
The biggest fear is that the trouble will move up the food chain. While subprime loans accounted for 20% of mortgages originated last year, David Liu of UBS estimates that fully 40% of last years loans are showing a lot of signs of stress.
One clear loser is David Einhorn, manager of hedge fund Greenlight Capital, who made a big, ill-timed gamble on the subprime sector when he fought his way onto New Centurys board last March. Einhorns seat on New Centurys board prohibited him from selling.
Another just goes up in smoke. It will be loing forgotten like the rest of thes ponzi organizations.
when creidt dries up, a leveraged financial institution can just evaporate before your eyes.
One of the Company_s lenders has extended to the Company $265 million in financing secured by the Company_s REIT mortgage loan portfolio and certain residual assets. The net proceeds from the financing will be used to refinance and/or satisfy some of the Company_s existing obligations. This lender has also provided financing to the Company to refinance the remaining balance of approximately $710 million in mortgage loans currently financed through another lending facility. This refinancing was undertaken in response to that lender_s notice to the Company exercising its rights to effect a repurchase by the Company of the loans and other assets it had financed for the Company.
Furthermore, the Company is in discussions with lenders and other third parties regarding a refinancing and other alternatives to obtain additional liquidity. No assurance can be given that any of these discussions will be successful.
The Company has not yet obtained waivers of the net income covenant from its remaining five financing arrangements since filing the Form 12b-25 on March 2, 2007. In addition, the Company has received an aggregate of approximately $150 million of margin calls, approximately $80 million of which has been satisfied. The Company has approximately $70 million in outstanding margin calls from five lenders.
The Company has only been able to fund a portion of its loans this week. In addition, its capacity to fund new originations is substantially limited due to its lenders_ restrictions or refusals to allow the Company to access their financing arrangements. The Company has been in frequent discussions with its lenders to identify ways to address their concerns in order to allow a greater funding volume in the near term. However, there can be no assurance that these efforts will succeed.
As a result of the Company_s current constrained funding capacity, the Company has elected to cease accepting loan applications from prospective borrowers effective immediately while the Company seeks to obtain additional funding capacity. The Company expects to resume accepting applications as soon as practicable, however, there can be no assurance that the Company will be able to resume accepting applications."
Five bucks says he hedged anyway- cause that is not selling technically.
Subprime is weird. My investor instructed GMAC to have their collections department call me if my payment is not made by the due date, but is still in the grace period. What I find laughable is that they said I directly authorized them to call me in my loan docs. I checked, not authorization. Then they tell me that I have to opt out of the reminder calls by sending the collections department a fax telling them to buzz off, and that I understand the call is just a courtesy. Harassment is what it is- now they bug you even before your payment is due. How is that for the nanny state- I was tempted to stop payment just to scratch and dent them- f**kers. After all I was still within RESPA. But I decided to play nice and make my payments.
Is this an announcement that's likely to happen tonight, after hours, if it's true? Now that the cat is slowly escaping the bag, what do they have to gain by waiting?
How come all the Pros did not see this one coming ??
Kids on wall street shorting NEW a year ago but....
"March 8 (Bloomberg) -- Ronald Muhlenkamp's $2.4 billion Muhlenkamp Fund, which lost value just once in the past 12 years, is getting hurt by the shakeout in the U.S. mortgage market.
Muhlenkamp's mutual fund dropped 4.8 percent since the start of the year, the worst performance of 90 competing funds tracked by Bloomberg that buy shares of companies perceived as being undervalued. The manager counts Countrywide Financial Corp., the biggest U.S. mortgage lender, among his 10 largest holdings. "
Fed Warned on Foreclosures as Mortgage Growth Cools (Update3)
By Craig Torres and Carlos Torres
March 8 (Bloomberg)
We have found neighborhoods with abandoned homes, 200 at a shot,'' said Louise Gissendaner, senior vice president and director of community development in Cleveland at Fifth Third Bancorp, the 10th-biggest U.S. bank by assets.It has technically devastated our city to a great degree.'
Those so-called value fund managers deserve to be burned. If value investing just means buying dips and craps, Ben Graham must have turned in his grave. The main reason of those value managers have outperformed peers since 2000 is that Fed managed to reflate economy. If Fed fails this time, we will find out who are value contenders, who are value pretenders.
Hey, I was considering buying 1 share of NEW, AH. I mean, after all the loot I made shorting this dog, I would like to have a stock certificate to mount on my wall.
Do you think they provide certificates to shareholders on demand?
I am most proud of is that I have a very mischievous younger brother, let me see that he is a person of a kind-hearted and sincere. We both brush the lastchaos gold in the game and fight the monsters in the same group.
When I have no kal gold, they are helps me, has helped my frail soul, helped my family, has helped my all, my particularly grateful them, did not have them, I am an utterly useless person, loafed in all directions!
At the same time I have kal online geons, I do not forget them, help them graduating, killing monsters, and take care of their children when they are on the battlefield in time!
Although some people do not like linden dollars , of course, they do not wrong, but I think game is something that can bring happiness to human, it will not the tool that decide the win or false.
"Laura Oberhelman said the real estate investment trust does not comment on market rumors."
Laura Oberhelman likes her job at New Century and wants to keep it. The thing is, a month from now, Laura won't have a job. She just doesn't know that yet.
Dead PR babe walking.
She knows it very well.....
Says Terry Wakefield, head of the Wakefield Co., a mortgage industry consulting firm: This is going to be a meltdown of unparalleled proportions. Billions will be lost.
BusinessWeek has learned that $700 million Carrington Capital and $3 billion Greenlight Capital may have gotten badly burned because of their intricate dealings with New Century Financial.
Magnetar Capital, a $4 billion hedge fund formed two years ago, may be on shaky ground, too. The question is, how many others may be suffering? This is a very opaque industry, so no one really knows, says economist Mark M. Zandi. My guess is that if you look at the top hedge funds, theyre bearing most of the risk.
Among hedge funds, Greenwich (Conn.)s Carrington seems particularly vulnerable. The fund was launched in 2003 with $25 million in seed money from New Century, which owns about a 35% equity stake. Not surprisingly, New Century is one of Carringtons biggest suppliers. Another major supplier is Fremont General (FMT), which says it plans to exit the subprime business.
Other hedge funds that have feasted on mortgage-backed securities will be hit hard if rating agencies start downgrading them, as is widely expected. That would be likely to send their values plummeting.
This is indeed a stress scenario, says Glenn T. Costello, co-head of the residential MBS Group at Fitch Ratings. Kevin Kanouff, who heads bond surveillance for Clayton Holdings, a consulting firm for institutional investors, adds that hedge funds are getting very nervous about their investments.
The biggest fear is that the trouble will move up the food chain. While subprime loans accounted for 20% of mortgages originated last year, David Liu of UBS estimates that fully 40% of last years loans are showing a lot of signs of stress.
One clear loser is David Einhorn, manager of hedge fund Greenlight Capital, who made a big, ill-timed gamble on the subprime sector when he fought his way onto New Centurys board last March. Einhorns seat on New Centurys board prohibited him from selling.
Another just goes up in smoke. It will be loing forgotten like the rest of thes ponzi organizations.
when creidt dries up, a leveraged financial institution can just evaporate before your eyes.
Hanging on by a thread:
From the 8-K
"Production and Financing Update
One of the Company_s lenders has extended to the Company $265 million in financing secured by the Company_s REIT mortgage loan portfolio and certain residual assets. The net proceeds from the financing will be used to refinance and/or satisfy some of the Company_s existing obligations. This lender has also provided financing to the Company to refinance the remaining balance of approximately $710 million in mortgage loans currently financed through another lending facility. This refinancing was undertaken in response to that lender_s notice to the Company exercising its rights to effect a repurchase by the Company of the loans and other assets it had financed for the Company.
Furthermore, the Company is in discussions with lenders and other third parties regarding a refinancing and other alternatives to obtain additional liquidity. No assurance can be given that any of these discussions will be successful.
The Company has not yet obtained waivers of the net income covenant from its remaining five financing arrangements since filing the Form 12b-25 on March 2, 2007. In addition, the Company has received an aggregate of approximately $150 million of margin calls, approximately $80 million of which has been satisfied. The Company has approximately $70 million in outstanding margin calls from five lenders.
The Company has only been able to fund a portion of its loans this week. In addition, its capacity to fund new originations is substantially limited due to its lenders_ restrictions or refusals to allow the Company to access their financing arrangements. The Company has been in frequent discussions with its lenders to identify ways to address their concerns in order to allow a greater funding volume in the near term. However, there can be no assurance that these efforts will succeed.
As a result of the Company_s current constrained funding capacity, the Company has elected to cease accepting loan applications from prospective borrowers effective immediately while the Company seeks to obtain additional funding capacity. The Company expects to resume accepting applications as soon as practicable, however, there can be no assurance that the Company will be able to resume accepting applications."
Five bucks says he hedged anyway- cause that is not selling technically.
Subprime is weird. My investor instructed GMAC to have their collections department call me if my payment is not made by the due date, but is still in the grace period. What I find laughable is that they said I directly authorized them to call me in my loan docs. I checked, not authorization. Then they tell me that I have to opt out of the reminder calls by sending the collections department a fax telling them to buzz off, and that I understand the call is just a courtesy. Harassment is what it is- now they bug you even before your payment is due. How is that for the nanny state- I was tempted to stop payment just to scratch and dent them- f**kers. After all I was still within RESPA. But I decided to play nice and make my payments.
I am a sucker at times.
dang.
CR, these toad bones and ground-up dog balls have been working so well the past several weeks that I'm going to buy a little medicine bag for them.
Is this an announcement that's likely to happen tonight, after hours, if it's true? Now that the cat is slowly escaping the bag, what do they have to gain by waiting?
New's going belly up all right. We knew this as of last Friday.
Three years from now, the lawsuits will still be going strong.
Finkle and Einhorn, Einhorn and Finkle. What's the connection?
(cue "The Crying Game" theme)
NEW investors know all there is to know, about the crying game.
NEW's investment banker is in Delaware right now. Read into that what you'd like.
WOW!
"however, there can be no assurance that the Company will be able to resume accepting applications."
Denial and desperate scrambling Nikki. Nobody wants to go to jail.
And here, that's a distinct possibility.
but Brooklynite, they were only helping American's reach for their Homeownership dream!
This is a serious question:
How come all the Pros did not see this one coming ??
Kids on wall street shorting NEW a year ago but....
"March 8 (Bloomberg) -- Ronald Muhlenkamp's $2.4 billion Muhlenkamp Fund, which lost value just once in the past 12 years, is getting hurt by the shakeout in the U.S. mortgage market.
Muhlenkamp's mutual fund dropped 4.8 percent since the start of the year, the worst performance of 90 competing funds tracked by Bloomberg that buy shares of companies perceived as being undervalued. The manager counts Countrywide Financial Corp., the biggest U.S. mortgage lender, among his 10 largest holdings. "
Fed Warned on Foreclosures as Mortgage Growth Cools (Update3)
By Craig Torres and Carlos Torres
March 8 (Bloomberg)
We have found neighborhoods with abandoned homes, 200 at a shot,'' said Louise Gissendaner, senior vice president and director of community development in Cleveland at Fifth Third Bancorp, the 10th-biggest U.S. bank by assets.It has technically devastated our city to a great degree.'
"How come all the Pros did not see this one coming ??"
Because the hardest thing to see coming is that which you don't want to see.
NEW trading halted?
b/c the greedy slime was making huge bonuses looking the other way with other people's money.
winjr-
Yes, Grasshopper.
winjr-
Yes, Grasshopper.
Ugh, sorry for the double-post.
I'm willing to bet they file before the weekend.
Now if LEND would just go down in flames I'll really be rolling.
Those so-called value fund managers deserve to be burned. If value investing just means buying dips and craps, Ben Graham must have turned in his grave. The main reason of those value managers have outperformed peers since 2000 is that Fed managed to reflate economy. If Fed fails this time, we will find out who are value contenders, who are value pretenders.
Black Friday aka BK Friday aka tomorrow
Please elaborate, what do you mean?
Hey, I was considering buying 1 share of NEW, AH. I mean, after all the loot I made shorting this dog, I would like to have a stock certificate to mount on my wall.
Do you think they provide certificates to shareholders on demand?
BK Friday = Burger King Friday
or bankruptcy
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