New Century filed Chapter 11 last month.  For those not sure about who
New Century is, they were #2 in the subprime market up until March
2007.

Now, the fact that they filed Chapter 11 and their funding was haulted
is not news.  However, they announced this week that they did not
receive any bids for their mortgage origination division.  As a result
they informed employees that 2,000 would be laid off effective
Friday.  They still have until May 10th to receive a bid on the
mortgage loan origination business as part of the Chapter 11.

The sad truth is - They are not the only one.

GE’s subprime lending unit, WMC, announced in April that they were set
to close three smaller offices and lay off at least half their
employees.

During April Aegis also closed an office and laid off at least 25
employees.

Followed by a settlement in January where 49 states alleged that the
lender was using predatory lending practices aimed at the elderly and
minorities, ACC, the parent company for Ameriquest, announced that it
will be laying off 3,800 employees nationwide.  Their explanation is
the cut back is part of a new strategy.  I would bet the new strategy
is paying off the $325 million settlement.

What does all this mean?  The subprime market is toast.  The hard
truth is that 67 lenders have gone under, filed bankruptcy, closed
their doors or have been taken over since late 2006.

This presents us with another problem.  Keep in mind that in late
December they predicted that we would see a staggering 2.5+ million
homeowners enter into some stage of Foreclosure.  With the subprime
market going down these homeowners have no where to go but back to
their lender to negotiate.  Well now let’s add to the oh so very
disasterous recipe that lenders are now following Corporate America
suite and outsourcing their customer service to countries like India
and Mexico.

Let me ask this?  Do we really think that someone in India or Mexico
could care less if an American family loses their home?  NO!  That
leaves us to pull together and do something to help homeowners get
back on track, save their home, give options.  Homeowners need to be
aware of what their options are before time runs out on them.
So many ripples in the ever so changing market that I could literally
go on for days and weeks.  The truth of the matter is - We are in
trouble!  This market is not going to bounce back over night.
Written By:  Donna Atwater ©2007

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