Embattled subprime lender New Century Financial Corp. said on Thursday it has stopped making loans, effective immediately.
Irvine-based New Century only has been able to fund a portion of loans brought to it this week, the company said.
Its ability to fund loans now is limited because of lenders’ restrictions.
The move could have a crippling effect on New Century if it doesn’t line up more financing.
The company has received $150 million of margin calls from its lenders, of which $80 million has been satisfied.
The calls require New Century to ante up more cash to secure its lines of credit with warehouse lenders.
There still are another $70 million in outstanding margin calls from five lenders, the company said.
It’s the latest bout of bad news for New Century, which has seen its stock plunge nearly 90% since February. The shares fell 25% on Thursday.
Some analysts are predicting that the company will declare bankruptcy.
New Century said in a filing with the Securities and Exchange Commission today that it expects to resume accepting applications as soon as practicable, but that there was no assurance that it would be able to do so.
The company said it is seeking to obtain additional funding from its lenders. It has only been partially successful in doing so, it said.
New Century said one of its lenders has extended it $265 million in secured financing, which will be used primarily to refinance some existing obligations.
The same lender also has provided financing to the company to refinance the remaining balance of $710 million in mortgage loans currently financed through another lending facility.
