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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.

dcanfiel
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