Morgan Stanley is in the process of holding an auction for $2.48 billion in mortgages from subprime lender New Century Financial, The New York Post reported Monday.

The loans represent the collateral given to Morgan Stanley for a $2.5 billion credit line the firm extended to New Century Financial.

As New Century, of Irvine, Calif., sank deeper into financial trouble earlier this month, Morgan Stanley assured the market that the loans and repurchase agreements it had made to the company were in order.

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Posted: 03|26|07 at 2:15 pm. Filed under: Auction News.