Listening to its general counsel might well have saved New Century FinancialCorp., once the nation’s second-largest subprime mortgage lender, fromplunging into bankruptcy a year ago.

That’s one lesson from a 581-page report filed Wednesday by Michael Missal.A partner at Kirkpatrick & Lockhart Preston Gates Ellis, Missal wasappointed by New Century’s bankruptcy trustee to investigate the company’sproblems. Missal wrote that former New Century general counsel Stergios”Terry” Theologides recognized the high risk of subprime mortgages andwarned senior managers about it in a memo in the fall of 2004. But no onepaid attention.