KANSAS CITY, Mo., Aug. 17 - As we disclosed previously, the tighter guidelines and adjusted pricing we have adopted will reduce loan originations until the secondary market shows signs of normalizing. This reduction in force includes stepping back temporarily from pursuing new loans in the wholesale market, a decision we are also seeing among some of our peer companies. For now, we believe this is the right thing to do economically. Our retail channel will be the dominant source of new loans in the coming months. We will follow through on the funding of loans already approved through the wholesale channel."

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WASHINGTON (AP) — The Federal Reserve, declaring that increased economic uncertainty poses risks for U.S. business growth, announced Friday that it has approved a half-percentage point cut in its discount rate on loans to banks.

The action was the most dramatic effort yet by the central bank to restore calm to global financial markets which have been roiled in the past week by a widening credit crisis.The decision means that the discount rate, the interest rate that the Fed charges to make direct loans to banks will be lowered to 5.75 percent, down from 6.25 percent.

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March 2 (Bloomberg) — New Century Financial Corp. disclosed a criminal probe and regulators told Fremont General Corp. to halt improper subprime loans, piling new scrutiny on two home lenders who’ve already lost about half their value this year.

Investigators are focused on New Century’s accounting and trading in its securities, the Irvine, California-based company said in a filing with the U.S. Securities and Exchange Commission today. Fremont said a regulatory order will require it to stop giving mortgages to people who can’t repay, and it plans to get out of the subprime home-loan business.

“It just shows there was a lack of principles and standards,'’ said David Hendler, an analyst at CreditSights Inc. in New York. “There was no real major guardian of conservative standards anymore, and that’s a danger to the safety of the market.'’

A surge in defaults on mortgages to the least-creditworthy borrowers has forced more than 20 lenders to close or seek buyers since the start of 2006. Earlier today, the Federal Reserve told banks to scrutinize their underwriting standards on subprime mortgages and make lending terms easier to understand.

New Century said in its filing that the U.S. attorney for the Central District of California is running a criminal inquiry “in connection with trading in the company’s securities, as well as accounting errors regarding the company’s allowance for repurchase losses.'’

SEC Seeks Meeting

SEC staff members also told New Century they want a meeting to discuss events that preceded the company’s Feb. 7 disclosure of a pending restatement to earnings, according to the filing. NYSE Regulation Inc. is reviewing trades that took place before Feb. 7 and has requested information, the company said.

New Century, the second-biggest subprime lender, said it will cooperate with the three inquiries. Laura Oberhelman, a spokeswoman for New Century, declined to comment on the filing. Earlier today, the company cut 300 jobs, or about 4 percent of its workforce, she said.

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