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New Century Executives Won't Testify at Senate Hearing

Reuters
Wednesday, 21 Mar 2007 | 11:23 AM ET

Executives from New Century Mortgagehave refused to testify at a Senate Banking Committee hearing on the widening crisis in the subprime mortgage market, the panel said on Wednesday.

However, executives from four other major subprime lenders will appear at the Thursday hearing, the committee chairman, Christopher Dodd, said in a statement.

HSBC Finance, Countrywide Financial , WMC Mortgage and First Franklin Mortgage will appear, the Connecticut Democrat said.

Dodd, a presidential hopeful, scheduled the hearing to look at the rising default rate in the subprime segment of the U.S. mortgage market, which has occurred amid a housing industry slowdown. The crisis has triggered broad concerns that fallout from the industry could spread and hurt the economy.

New Century faces a federal criminal probe into trading of its securities and accounting errors, and the Ohio attorney general has accused the company of violating state laws in its loans to consumers.

New Century, based in Irvine, Calif., has stopped taking new loan applications and was delisted by the New York Stock Exchange last week.

Testifying on Thursday for HSBC will be Chief Executive Brendan McDonagh; Countrywide Financial will send Executive Managing Director Sandor Samuels; WMC Mortgage will send Chief Executive Laurent Bossard; and testifying for First Franklin Mortgage will be President L. Andrew Pollock, Dodd said.

HSBC Finance is a unit of HSBC Holdings, WMC Mortgage is a unit of General Electric, and First Franklin Mortgage is part of Merrill Lynch.

Also testifying at the Thursday hearing will be federal banking regulators, a state banking supervisor, and two consumer groups.

Federal regulators who will appear are Roger Cole, director of banking regulation at the Federal Reserve Board; Emory Rushton, chief bank examiner for the Office of the Comptroller of the Currency; Sandra Thompson, director of consumer protection at the Federal Deposit Insurance Corp.; and Scott Polakoff, chief operating officer of the Office of Thrift Supervision.

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