New Century Financial Corp., the nation’s second-biggest subprime mortgage lender, said it doesn’t have the cash to pay creditors who are demanding their money, increasing speculation that the company will go bankrupt.

The New York Stock Exchange, citing the credit crisis, halted trading of New Century this morning until it decides whether to keep listing the company’s securities. Shares of the Irvine, Calif.-based company, already down 90% in 2007, lost half their remaining value in pre-market trading, and rivals fell as much as 25% today.

“They’re one step closer to bankruptcy,” an analyst at Keefe Bruyette & Woods in New York who rates the shares “market perform,” Bose George, said. “The only possibility for survival now is for someone, potentially an investment bank, to step in.”

New Century may be insolvent because too many of its own customers — most of whom have poor credit histories or heavy debt burdens — aren’t repaying their loans. Bad American subprime mortgages are at a seven-year high, forcing more than two dozen lenders to close or sell operations. Their woes may contribute to more than 1.5 million Americans losing their homes and 100,000 people losing their jobs, according to real estate executives, economists, analysts, and a Federal Reserve governor.

New Century said in a federal filing it doesn’t have funds to repay lenders including Morgan Stanley, Citigroup Inc., and Goldman Sachs Group Inc. The creditors want New Century to repurchase all outstanding mortgage loans they financed.

The company’s shares traded for as little as $1.36 in pre-market trading, compared with $3.21 on Friday, a day when the stock hit an eight-year low. The company said March 2 that American prosecutors in Los Angeles are investigating trading in New Century’s securities before a February 7 announcement that it planned to restate earnings. Investigators also are examining New Century’s failure to properly account for the cost of bad loans.

“It’s kind of the perfect storm,” an analyst in the financial institutions group at Fitch Ratings, Vince Arscott, said. “You throw in accounting issues and delayed filings, you throw in a criminal inquiry, and then the whole secondary market is really sour on subprime.”

Rival lenders including Fremont General Corp., Accredited Home Lenders Holding Co., and NovaStar Financial Inc. have shed more than half their value this year, and Countrywide Financial Corp., the nation’s biggest mortgage company, has tumbled 17%.

Accredited, which fell 28% today, was “considered a better player in the space,” an analyst at Fox-Pitt Kelton, Matt Howlett, said. “But they’re not immune to the deplorable conditions in the subprime space. You can’t create any value in this market, and the likelihood of a sale, which we thought was really the only exit, just seems more unlikely every day.”

Fremont, which shut its subprime lending operations last week under pressure from American regulators, lost 16% yesterday. NovaStar shed 19% and Countrywide declined 2.7%.

Analysts including Merrill Lynch & Co.’s Kenneth Bruce predicted last week New Century will go bankrupt. New Century has used up cash as rising default rates forced it to buy back loans it sold to investors when borrowers didn’t make their payments. The company said last week it’s in talks with lenders and potential partners about refinancing or “other alternatives.”

New Century’s financing agreements have so-called cross-default provisions that trigger accelerated payments. Should all of its creditors force it to repurchase their loans, the total obligation would be about $8.4 billion, New Century said yesterday.