More bad news for New Century Financial. The struggling subprime lender is edging ever closer to bankruptcy. On Tuesday, the company admitted that that it can no longer sell mortgage loans to Fannie Mae or act as a primary servicer of mortgage loans.

In a filing with the U.S. Securities and Exchange , New Century said that Fannie Mae terminated a mortgage selling and servicing contract with the beleagured subprime lender, citing alleged breaches of contract.

Meanwhile, New York's banking department suspended the banking license of New Century's Home123 affiliate for up to 30 days.