New Century Selling MSRs.

New York -- New Century Financial Corp. formally unveiled its bankruptcy reorganization plan as Mortgage Servicing News went to press in early April.

New Century, based in Irvine, Calif., said the pre-packaged plan involves seling its servicing assets and platform to Carrington Capital Management for $139 million, subject to bankruptcy court approval.

The company also said that CIT Group and Greenwich Capital had agreed to provide as much as $150 million in debtor in possession financing to keep the company in business as it reorganizes.

New Century said it would immediately cut more than half of its workforce, or 3,200 jobs, as part of the reorganization, according to published reports.

As New Century Financial Corp. weighed its bankruptcy options at the end of March, one of its warehouse lenders, Morgan Stanley, held a public auction for $2.48 billion in loans originated by the troubled subprime lender.

A source familiar with the matter said Morgan believes it has the legal right to the loans because NCFC is in default on its warehouse covenants. (Morgan is one of several warehouse lenders that recently informed NCFC that it no longer will fund its production.)

Morgan auctioned the residential loans "as is" with no representations and warranties. It was expected to pick three finalists who will then be allowed to conduct due diligence on the assets. Morgan had originally committed $2.5 billion in warehouse lines to NCFC.