Founded in 1995, New Century Financial Corporation grew to become the second-largest originator of subprime mortgages in the United States. Operating as a real estate investment trust (REIT), its primary business model involved originating high-risk home loans to borrowers with poor credit histories and then bundling these loans into mortgage-backed securities to sell to investors. The company's rapid growth was fueled by the housing boom, but it suffered catastrophic losses when the housing market cooled and default rates soared. In April 2007, New Century filed for Chapter 11 bankruptcy, an event that is widely considered a major catalyst and early warning sign of the 2008 global financial crisis.

Founded in

United States