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Crisis Looms in Mortgages

http://www.nytimes.com Posted by renthusiast 669 days ago

On March 1, a Wall Street analyst wrote an upbeat report on New Century Financial, a company that specializes in making mortgages to cash-poor homebuyers. The company had already disclosed that a growing number of borrowers were defaulting, and its stock, had lost half its value in three weeks. What happened next seems all too familiar to investors who bought technology stocks in 2000 at the breathless urging of Wall Street analysts. Last week, New Century said it would stop making loans and needed emergency financing to survive.

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