New Orleans Not surprisingly, New Century, once almost the king of the subprime lenders, filed for bankruptcy while trying to sell what was not bolted down and laid off about 3000 people or half of their staff. The CEO, Brad Morrice, who Jordan Ash, several ACORN leaders, and I had met along with members of their board and top staff last year in our first formal meeting with New Century in the first week of his job, announced that he was sorry it had come to this.
We did a press release demanding that the lessons of the failure be understood and the right thing be done for the mortgage holders caught in this mess.
Mike Shea, from our housing operation, added a good point in talking to Kevin Whelan, our communications director, that there should be a moratorium on foreclosures for mortgage holders of a subprime going under. In fairness, why should the subprime be protected while the little guy still ends up taking a fall? This is a solid demand.
Jordan has told me as recently as last week that we have more than 100 New Century cases in our office that we are not able to get the company to resolve simply because they no longer have the staff to solve the problem or the money to buy back the problems. In one case they had rewritten one of the mortgages correctly after the buyback, and we were stuck because they would no longer sign the papers and execute the agreement. Out of money! Out of time!
The analogy would be equivalent to protecting the criminal, while walking away from the victim.
There needs to be a stop to all foreclosures from these failing subprimes until we can put these pieces back together again. And, it needs to be done now!