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Anything is possible in subprime %)
Hopefully Morgan Stanley can fetch a decent price for the NEWC loans. It's a sizeable chunk... Still thinking BK is likely. IMO only.
Read this:>>>http://biz.yahoo.com/ap/070315/subprime_mortgage_sector_snap.html?.v=1
I liked this part:
"stocks of subprime lenders have crept up as several major Wall Street banks hinted they might buy distressed mortgage banks if the price is right.
"Obviously, these origination platforms are going to be absorbed by somebody," said Bear Stearns Cos. Chief Financial Officer Samuel Molinaro. "There will be a lot of assets moving, and I expect we will participate in some of that."
BE STRONG GO LONG !
Anybody heard that NEWC maybe picked up by a Private Equity group from Dubai ?
Thanks Net
Looks like the positive side is being picked up by Mr Market. Hope we can rally big today. Premarket is pointing that way... Still think BK is likely. But I'm long regardless.
Then again, they snuck out of the $0.9 bill Barclay's grasp for a cheap $46 mill. But only $60 mill cash. They're still probably toast. Financing is hard to come by when being investigated for criminal offenses. At least if anything the news today is a wash or positive.
Lazard has been retained so the BK scenario I was thinking might be probable seems to be looming IMO only.
Were included in Morgan Stanley news
http://biz.yahoo.com/rb/070321/morganstanley_results.html?.v=7
agree...
RHWC charts looks great imo...
20EMA ready to cross over the 50MA....NICE...........
Fed Meeting Results at 2PM.
Wow look at the RHWC chart the last few weeks. Up up...and a lot of buying coming in. Great bid support, $750+ Million in revenues coming per PR. Should rocket the stock.
Execs refuse to testify at hearing...hmmm
C'Ya...RBR
Empty House Here...Has that hollow feel to it. Waiting for an echo.
C'Ya...RBR
Interesting to see what all unfolds here, and if the people at the top look anything like the Jefferey Skilling clan he may get some bunk buddies coming to visit with him long term in Minnesota.
March 16, 2007 - 7:19 PM EDT
NEWC 1.69 -0.48
Today 5d 1m 3m 1y 5y 10y
Shepherd, Finkelman, Miller & Shah, LLC Files Class Action Lawsuit Against New Century Financial Corp. -- NEWC (Pink Sheets)
HARTFORD, Conn., March 16 /PRNewswire/ -- Shepherd, Finkelman, Miller & Shah, LLC (http://www.sfmslaw.com; e-mail: jmiller@sfmslaw.com), a law firm with offices in Connecticut, Pennsylvania, New Jersey, Florida, and Wisconsin announces that it has filed a lawsuit seeking class action status in the United States District Court for the Central District of California, on behalf of all persons (the 'Class') who purchased the common stock of New Century Financial Corp. (Pink Sheets: NEWC) ('New Century' or the 'Company') between April 7, 2006 and February 7, 2007, inclusive (the 'Class Period'). A copy of the Complaint may be obtained from the Court, or you can call our offices toll free at either 866/540-5505 or 877/891-9880 to speak with an attorney regarding this matter and we will send you a copy of the Complaint.
The Complaint alleges that New Century, Brad A. Morrice, Robert K. Cole and Edward F. Gotschall (the Company's three co-founders), and officers Patti M. Dodge and Taj S. Bindra ('Defendants') violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the Class Period that had the effect of artificially inflating the market price of the Company's stock. The Complaint alleges that Defendants misrepresented and/or omitted to disclose, despite a duty to do so, that the Company, among other things, was under-reserving for loan losses while conditions in the sub-prime market were deteriorating, had failed to properly value residual interests in loan securitizations in 2006 and earlier periods, lacked adequate internal controls, and that New Century's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ('GAAP'). The Complaint further alleges that these false statements caused New Century's stock to trade at artificially inflated prices during the Class Period, which the Company's insiders took advantage of by selling large quantities of their own shares of New Century stock.
The Class Period ends on February 7, 2007, when New Century announced, after the market had closed, that it would have to restate its financial results for the first three quarters of 2006 because of accounting violations. On this news, New Century's stock plummeted 36% on February 8th, closing at $19.24 per share. Since then, the Company has announced that it received a grand jury subpoena regarding its accounting treatment and insider sales, and that it is the subject of an investigation by the SEC. On March 13, 2007, New Century's stock was delisted from the NYSE, and the last reported share price was $1.66. The Company's shares now trade on the Pink Sheets.
If you purchased New Century stock between April 7, 2006 and February 7, 2007, inclusive, you may qualify to serve as lead plaintiff on behalf of the Class. All motions for appointment as lead plaintiff must be filed with the Court by no later than April 10, 2007. Any member of the proposed Class may move the Court to serve as lead plaintiff in this action through counsel of his or her choice, or may remain an absent class member. There are certain legal requirements to serve as lead plaintiff, which we would be pleased to discuss with you. Please contact James E. Miller, Esquire (866/540-5505; jmiller@sfmslaw.com), or James C. Shah, Esquire (877/891- 9880;
jshah@sfmslaw.com), if you would like to discuss this action or have any questions regarding this notice or your rights.
Shepherd, Finkelman, Miller & Shah, LLC (http://www.sfmslaw.com) is a national law firm that represents investors, including institutions and individuals, as well as consumers, in class action and other complex litigation, and maintains offices in Connecticut, Pennsylvania, New Jersey, Florida, and Wisconsin. The firm's attorneys have appeared in matters on behalf of our clients throughout the United States and have been appointed lead counsel in numerous class actions and corporate governance matters.
SOURCE Shepherd, Finkelman, Miller & Shah, LLC
Source: PR Newswire (March 16, 2007 - 7:19 PM EDT)
News by QuoteMedia
www.quotemedia.com
Morningstar.com
Real Estate Slowdown, Subprime Meltdown--Now What?
Friday March 16, 4:30 pm ET
By Ganesh Rathnam
We at Morningstar had long believed that the runup in real estate prices from 2001 to the end of 2005 was unsustainable and had to end at some point. We've also been bearish on property REITs during that time, as most of their returns came from price appreciation--driven by ever-higher estimates of underlying property valuations--rather than dividends and dividend growth. My colleague Craig Woker went as far as comparing the real estate bubble to the dot-com bubble of the late 1990s and 2000. He detected the same emotional approach toward purchasing real estate that people adopted toward purchasing stock in Webvan.com and Pets.com--the "so many people can't be wrong" rationalization. Arguably, buyers were more confident in their real estate purchases because real estate is more tangible, with real intrinsic value.
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Signs of Weakness
Since 2005, we've seen several signs of weakness. Growth in real estate prices has slowed significantly, and reported prices have dropped precipitously in a few of the most speculative areas such as Miami and San Diego. However, we think the decline is far more severe than headline numbers would suggest. Sale prices can be propped up by having a buyer purchase at the list price, while the seller throws in incentives such as free upgrades, parking spots, and help with closing costs, assessments, and even mortgages. A more telling metric is the drop in sales volume and the buildup of inventory. It stands to reason that if sales volume remained at normal levels, price declines would be more severe. But perhaps the canary in the coal mine was the retirement of www.condoflip.com--a Web site catering to speculators who flipped condos sight unseen.
Subprime Meltdown
The riskiest companies took the first hit. With the prices of real estate seemingly heading in only one direction, subprime mortgage originators resorted to bad underwriting and exotic products to create an illusion of affordability. We had identified a possible liquidity crunch as a key risk for these companies, but the speed of the meltdown was surprising. Seemingly overnight, these companies were hit with two crushing blows. An expected uptick in delinquencies forced the lenders to repurchase delinquent loans, and at the same time, creditors closed off the financing spigots, causing a liquidity crunch and leaving firms vulnerable to liquidation. Indeed, several of them have filed for bankruptcy or shut down operations, and more bankruptcies could be on the way. We would suggest that only the most aggressive investors speculate on these firms.
However, we believe more conservative investors can profit from this meltdown as well. All this real estate doom and gloom has served up opportunities to invest in several high-quality businesses at bargain prices. At Morningstar, we pride ourselves on being contrarian investors. We heartily agree with Buffett's maxim of buying to the sound of cannons and selling to the sound of trumpets. We've identified companies whose businesses are temporarily suffering due to real estate exposure but are fundamentally sound and should prosper when things return to normal. Moreover, these companies are not at the mercy of fickle and skittish short-term financiers, whose sudden cold feet could drive an otherwise viable company out of business. We would put these firms on our watch list and pounce at 5-star prices.
Homebuilders
Homebuilders, as one might expect, have been the most prominent casualty of the slowdown in residential real estate. The industry has experienced severe compression in gross margins, the markup charged to homebuyers over land and building costs. Record cancellations have eroded the pricing power of these companies, forcing them to batten the hatches to wait out this downturn. Worse, most of these companies extrapolated 2005 trends into the future and got caught with too much land on their balance sheets, using costly debt to carry this (for now) dead asset. However, we've identified some builders that have avoided this problem and are positioned to weather this storm.
Meritage Homes (NYSE:MTH - News)
Meritage Homes is one of the largest builders in the nation, and importantly, has a large presence in Texas to balance out exposure to boom-bust states such as California, Nevada, and Florida. It was at the top of the class in maintaining a lean inventory throughout the boom due to its deft use of options. Today, it sits with less than one year's worth of owned land based on current order rates, and less than six years' worth including option commitments. It's easy to see why Meritage will likely fare better in the current downturn than competitors. To add icing to the cake, its shares trade at less than book value. Though the market is currently fixated on the company's exposure to formerly hot markets, we see opportunity.
MDC Holdings (NYSE:MDC - News)
MDC Holdings, like Meritage, stresses holding less land on its balance sheet, allowing it to earn impressive returns on capital. Its total land position, at less than three years of lots based upon current production rates, is among the lowest in the industry. This is important, as it means less possibility of impairments and also gives the company a leg up on competitors once the eventual upturn arrives. Without a bloated balance sheet, MDC will be in a position to reload its land pipeline at significantly cheaper prices. Though industrywide returns will be depressed for several years, MDC should be among the leaders going forward.
Title Insurers
We believe that the title insurance industry is healthy and has demonstrated the ability to weather troughs in real estate cycles. The industry serves multiple segments that usually perform independently. For example, despite a double hit of weak seasonal and cyclical factors in the residential market in the fourth quarter of 2006, all three companies we cover ( First American (NYSE:FAF - News), Fidelity National (NYSE:FNF - News), and LandAmerica (NYSE:LFG - News)) showed decent profits, propped up by commercial real estate. We expect the companies will grow along the lines of population and household increases. Solidifying the moat around these companies is the fact that, despite the bad press and regulatory concerns, there is no substitute to the role the title companies play in real estate transactions.
First American
This company has rapidly gained share profitably, and the ancillary products that augment title revenue are way ahead of the competition. Even better, the company recently bought CoreLogic, a data management company that customizes and markets information derived from First American's enormous real estate database. The company is leveraging this data to become a leader in providing real estate information, which adds to economic returns.
Mortgage Insurers
Mortgage insurers provide protection to lenders making real estate loans to lower-income home buyers, who want to enjoy the benefits of home ownership but are unable to afford a 20% downpayment that the secondary market requires. Barring a recession that leads to outsized job losses among the lower-income demographic, the mortgage insurers should weather the current storm in fine shape, in our opinion. Over an economic cycle, mortgage insurers have shown the ability to withstand recessions, competitive threats, and regulatory scrutiny. We believe the fundamentals are good for this industry, particularly due to the increased housing demand from minorities and immigrants. Long-term forecasts predict a growing percentage of the population pursuing the American dream of home ownership, and mortgage insurers assist many first-time buyers in taking this step.
MGIC Investment (NYSE:MTG - News)
We believe that MGIC's decision to acquire Radian Group (NYSE:RDN - News) is timely because it strengthens MGIC's moat. The acquisition increases MGIC's size, giving it a better chance of navigating the choppy, cyclical nature of the mortgage-interest-sensitive real estate markets. The combined entity will also possess the added benefit of multiple executions of credit enhancement through financial guaranty capabilities, an area in which Radian has traditionally excelled.
PMI Group (NYSE:PMI - News)
Captive insurers with large lenders such as Wells Fargo (NYSE:WFC - News) have been steadily eroding PMI's market share in the U.S. The company has combated this by expanding internationally, carving the second-largest presence in Australia. A growing portion of market participants now opt for customized mortgage pool protection outside of the government-sponsored secondary market. Via its lead investment in financial guarantor FGIC, PMI hopes to use cutting-edge marketing to meld mortgage insurance with credit-enhancement services.
Banks
We've identified a high-quality bank that has been unfairly punished because of its perceived vulnerability due to exposure to subprime mortgage originations and real estate loans held on the balance sheet. Large banks have a diversified revenue stream and are less dependent on real estate loans and mortgage originations than they once were. What's more, banks tend to hold the best-quality loans on their books and typically experience charge-off rates of less than 25 basis points on mortgages.
Wells Fargo
Wells Fargo is one of the best-run banks in the country. The firm, in all fairness, has a larger exposure to real estate than the average large bank and, according to Inside Mortgage Finance, is the largest subprime mortgage originator. However, the firm's underwriting is exceptional, resulting in the mortgage portfolio sporting minuscule charge-offs. Wells Fargo's ace in the hole is its large mortgage servicing portfolio, which acts as a natural hedge to its mortgage loan origination business.
Jim Ryan and Eric Landry contributed to this article. Ganesh Rathnam owns shares in First American and call options on New Century Financial.
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Both NEWC and NFI moving up well in the premarket today.
Wow look at LEND. up to 12 bucks already. Hopefully NEWC will follow.
(CBS) Despite all the bad buzz about subprime mortgages, Sunday Morning correspondent Ben Stein says the economy is strong and that the amount of foreclosures is small in relative terms.
--------------------------------------------------------------------------------
Perspective is a great thing. It's especially good where money and the stock market are concerned.
Recently, there has been large movement, mostly down, as the stock market reacts to a large number of foreclosures on homes in the so-called "subprime" mortgage area. This is the place where higher risk borrowers got loans during the housing boom of the last three or four years. Now, to people who actually made those loans, it's a scary phenomenon to see those loans default, and the companies that made those loans are in real trouble.
But here is where perspective comes in, and is such a lovely thing: The U.S. mortgage market is immensely large, spectacularly large. Total foreclosures are a large amount in dollar terms, but a tiny amount in percentage terms. Foreclosures are now about 1 percent of loans. The lenders will sell the houses and recover at least fifty per cent of the value. That means the total loss may be about ½ of one percent of the mortgages made and probably less, and a lot of it is insured. This is an absolutely trivial number in the context of a $14 trillion economy with net wealth in the realm of $60 trillion.
This whole subprime mortgage mess is just an excuse for the gunslingers and river boat gamblers on Wall Street to use their tricks to move markets and make money. The economy is still very strong. The most cagey players on Wall Street like Goldman Sachs are now trying to buy — not sell — as much distressed merchandise in the mortgage area as they can. This is a good clue about where the smart money is going.
You can panic if you enjoy being panicky. But this will all blow over and the people who buy now, in due time, will be glad they did.
Anyway, that's my perspective.
© MMVII, CBS Interactive, Inc. All Rights Reserved.
Ben Stein
CBS
RHWC will go up as a % more than NEWC.
If NEWC gets bought out or someone saves them...I am sure it will be even less pennies on the dollar.
Hawaii-x, it's Pink. It's not on the OTC. It actually ended up closing better today than I thought it would. Congrats guys!
JJ
Posted by: Hawaii-x
In reply to: chaseitup1 who wrote msg# 232
Date:3/19/2007 4:27:08 PM
Post #of 238
Only problem, this will be on the OTC for a while...
Plus, no revenues at the moment. I wonder how many wholesale lenders they are losing since those guys aren't getting paid.
Plus, no revenues at the moment. No NEW revenues but they are still collecting on loans, they dont only get paid for loan origination right ?
Iam jumping in , should be fun.
Yes, I saw 20K- 100K blocks getting bought at the ask. Someone is loading up while the stock is LOW
"The U.S. mortgage market is immensely large, spectacularly large. Total foreclosures are a large amount in dollar terms, but a tiny amount in percentage terms. Foreclosures are now about 1 percent of loans. The lenders will sell the houses and recover at least fifty per cent of the value. That means the total loss may be about ½ of one percent of the mortgages made and probably less, and a lot of it is insured. This is an absolutely trivial number in the context of a $14 trillion economy with net wealth in the realm of $60 trillion."
Ben Stein commentary yesterday on NEWC:
http://www.cbsnews.com/stories/2007/03/18/sunday/main2581859.shtml
chaseitup1, no worries:) BIG money is buying new century, that tells me the blood bath may be short lived. gotta have the stomach for it, fun ride!
Only problem, this will be on the OTC for a while...
Plus, no revenues at the moment. I wonder how many wholesale lenders they are losing since those guys aren't getting paid.
I saw some HUGE buys today in NEWC.. good sign! I think Ben Stein is right and this will be back up big soon..
well i was close we almost got there lol...
happy i got in on the big scare in the morn. tomorrow will rock again
Dang Bid-whackers, friggin' amateur hour all over the OTC.
I called NEW century and reached a couple operators so they have people. I even reached someone at HQ. but the IR person I reached just went to an answering machine. Poor person is probably swamped... I was just asking a couple basic questions so hopefully I'll hear back before long.
EOD run on RHWC? and on primes?
NEWC huge gapper tomorrow.. get in before the bell!!!!
"drop not done, just got a few at 1.75
this is going to turn around, just panic sellers, we will close green!!"
:)
http://www.cmhc-schl.gc.ca/odpub/esub/63830/63830_2007_M02.pdf
Canada still booming.
GO RHWC!
Subprime getting slapped around:
Subs...LEND, NEWC, FMT, FICC all down.
Prime...LEH, GS, BSC, MS doing well.
RHWC is going to be a monster. Prime and subprime loans, but only fixed products. Insurance components and Job-loss protection guarantee.
http://www.investorshub.com/boards/board.asp?board_id=5251
Buying more at these prices while Blood Is In The Street
so this one looks to recover and not go into BK? is that what that message is saying.. focusing on no new loans, but will process the old ones??
rock n roll just picked up more on that dip, gettin ready for the afternoon:)
Anyone notice Alpha Trade not keeping up with Bid and Ask
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