Reply #31: Moody's might cut ratings of sub-prime mortgage lenders [View All]

[54anickel]

http://www.latimes.com/business/la-fi-wrap22.1feb22,1,685108.story?coll=la-headlines-business

New Century Financial Corp. and Ameriquest Mortgage Co., both based in Orange County, are among five sub-prime mortgage lenders that may have the ratings cut on the part of their businesses that collect home loan payments amid a rise in delinquencies, Moody's Investors Service said Wednesday.

Moody's said it would review the so-called servicer ratings for affiliates or units of New Century, Ameriquest, NovaStar Financial Inc., Accredited Home Lenders Holdings Co. and Winter Group. New York-based Moody's said it anticipated lowering the ratings by no more than one level.

More than 20 sub-prime lenders have shut down, scaled back or been sold in the last five months amid rising late payments and lower prices for new loans. Others, including San Diego-based Accredited Home and NovaStar Financial of Kansas City, Mo., this month reported quarterly losses.

New Century has said it expects to post a loss. Shares of the Irvine-based lender fell $1.22 to $17.55. Orange-based Ameriquest is privately held.

Moody's said its review was "prompted by the heightened level of volatility in the sub-prime mortgage market." The companies face "lower profitability as well as potentially an increased level of liquidity risk given current market conditions," it said in a statement.

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