NEW YORK (Reuters) — New Century Financial Corp., a subprime mortgage lender suffering a severe cash crunch, has tapped Lazard Ltd. as its financial adviser, three creditors familiar with the situation said.San Francisco-based law firm O’Melveny & Myers, meanwhile, has been retained as legal adviser, these people said.

Bermuda-incorporated Lazard, an international firm based in New York, is one of the world’s biggest restructuring advisers, working on a number of high profile bankruptcy assignments including Owens Corning and Collins & Aikman.

Lazard and O’Melveny declined to comment. New Century spokeswoman Laura Oberhelman declined to comment.

New Century shares, down 11 percent to $1.49 in early-afternoon trading, have lost 97 percent of their value since nearing a 52-week high of $51.97 last May.

Subprime lenders, which make home loans to people with poor credit histories, have been battered by rising delinquencies and defaults. Adding to their woes, lenders have been forced to buy back, at a loss, hundreds of millions of dollars in bad loans they had previously sold to Wall Street banks.

New Century, the largest independent US subprime mortgage lender, has been fighting for its survival for several weeks now as it fends off demands from creditors and regulators. The Irving, California-based lender has had its own financing cut off, and is not making new loans.

Last Monday New Century warned it doesn’t have enough cash to pay the more than $8 billion it owes creditors. Many analysts have warned New Century is near bankruptcy.

New Century said in February that it plans to restate earnings for the first three quarters of 2006, and post a loss for the fourth quarter. The New York Stock Exchange delisted New Century’s common shares and the company is under investigation by the Securities and Exchange Commission.

Default and delinquency rates in the US subprime mortgage market have jumped as the housing market slowed and prices fell. A recent report from the Mortgage Bankers Association said that 13.33 percent of subprime loans were past due in the fourth quarter, the highest level since 2002.

More than two dozen subprime lenders have quit the industry in the last year, and at least four larger lenders have sought bankruptcy protection since December, including Irvine-based People’s Choice Home Loan Inc. on Tuesday.