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Edward Gotschall dies at 53; helped found subprime giant New Century Financial
Edward Gotschall, one of the founders of subprime mortgage giant New Century Financial, died Thursday at his home in Cota de Caza. He was 53.
The former high school football standout, who retired as New Century's chief financial officer, was watching a replay of the Fiesta Bowl between Ohio State University and the University of Texas when he died.
O'Connor Mortuary, which is preparing the death certificate, declined to release the cause of death, but the Orange County coroner's office reported that he died of natural causes.
Gotschall worked at several firms until he started New Century in 1995 with two colleagues from Plaza Home Mortgage in Santa Ana, Robert Cole and Brad Morrice. They took the company public two years later and quickly developed it into one of the largest subprime lenders in the United States, making $60 billion in loans annually, mostly to people who could not qualify for conventional loans.
After it was forced to restate some of its quarterly earnings in early 2007 because of significant accounting problems, investors, who had driven the stock as high as $65 a share, fled in droves. The company went bankrupt in April 2007.
Former New Century executives said Gotschall was adept at taking the enormous amount of data coming from banks, brokers and investors and turning it into a viable business plan.
"He was a good strategic thinker. He could see the big picture and assess situations and rapidly develop numerical pictures in his mind of how things would work or wouldn't work," said Fredric Forster, one of New Century's independent board members.
Another former board member, William Popejoy, called him "a big bear of a guy, easy to like."
"He was a rare combination of a good person with numbers and a good personality," he said.
As the company was running into trouble in 2005 and 2006, Gotschall, who remained on the board after his retirement, sold more than $27 million in stock. His sales and sales by other executives are part of an investigation by the U.S. Department of Justice.
Since his retirement, Gotschall had been active as a board member with the Mission Hospital Foundation and with the Gotschall Family Foundation, which gave money to the Boy Scouts of America, Santa Margarita Catholic High School and other charities. In 2005, Gotschall and his wife, Susan, pledged $3 million to Mission Hospital, which named its trauma center after the family.
One of Gotschall's sons was treated at the hospital after he was bitten by a dog, and his daughter was treated there for a broken arm, Gotschall told the Orange County Register in April 2005.
"I have come to the simple conclusion in my life that it is time to step up and do more," he said at the time. "This is just a start."
Gotschall was born Feb. 11, 1955, in Steubenville, Ohio. He attended Ohio State University and graduated from Arizona State University in 1979. He moved to Southern California with his family in 1982.
In addition to his wife of 27 years, he is survived by three children, Brittany, 24, Matthew, 21 and Ryan, 18, sisters Susan Hodges and Carolyn McKinley, and his mother, Lottie Gotschall.
Funeral services will be held at Saddleback Church in Lake Forest at 10 a.m. Wednesday.
Times staff writer E. Scott Reckard contributed to this report.