MarketWatch.com is reporting that New Century is facing increasing pressure from its end investors to make good on mortgage buy-backs that are a result of rising delinquencies and New Century’s inability to maintain covenants agreed to with their investors.
New Century Financial said on Monday that Deutsche Bank has asked it to repurchase $900 million worth of loans more quickly, according to a Securities and Exchange Commission filing by the subprime mortgage specialist.
DB Structured Products, a part of the German bank, sent notices to New Century on March 14 and 15 reiterating default allegations and accelerating the company’s obligation to buy back all outstanding mortgages financed under agreements struck in 2005 and 2006, the filing stated.
New Century is currently being asked to repurchase approximately $8.2 billion dollars in loans from its collective end investors.
Read the SEC filing here.
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