Message Font: Serif | Sans-Serif
No. of Recommendations: 0

New Century Limps Toward Bankruptcy; Housing May Suffer

New Century took another step toward bankruptcy Monday, raising fears that the subprime lender will trip up housing and other industries.

So what's it got to do with HOV?

After Hovnanian (NYSE:HOV - News) Enterprises posted a quarterly loss and big write-offs on some Florida properties Friday, CEO Ara Hovnanian said housing hasn't hit bottom.

Builders are now waiting to see if home buyers emerge from the slow winter season with an optimistic attitude. There is reason to believe they won't.

Credit Squeeze

Lenders are tightening credit. In the latest Fed survey of senior loan officers, a net 16.4% said they were raising standards on mortgage loans. That's the most since 1991, and a reversal of nearly two years of loosening.

And that's before the latest wave of subprime gloom and regulators' latest proposed stiff standards.

HOV's troubles continue. Worse news: Housing is a leading economic indicator.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.