Winners Could Emerge from Subprime Woe
Liquidity issues for subprime lenders may result in a further industry shakeout. Concerned about New Century's (NEW) ability to remain solvent, creditors recently forced the company to stop making loans. Subprime lenders such as New Century are largely dependent on outside creditors to finance new loans. Given the large number of loans that have recently been put back to subprime lenders due to high default rates, subprime lenders' liquidity, and ability to remain solvent, have become even more precarious of late.
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