State Banking Commissioner Issues Cease and Desist Order Against
New Century Mortgage Corporation and Its Affiliate
March 14, 2007
Today state Banking Commissioner Howard F. Pitkin issued a Cease and Desist order against New Century Mortgage Corporation and its affiliate, Home123 Corporation, both of Irvine, California.
Both companies are licensed mortgage lenders in Connecticut. New Century is one of the largest subprime lenders in the country and it was ordered to cease and desist for failing to perform agreements with its Connecticut borrowers. The companies have been experiencing financial difficulties and recently announced the cancellation of their lines of credit by their warehouse lenders. New Century was recently delisted from the New York Stock Exchange. Additionally, the companies notified the Department of their inability to fund loans on a go-forward basis.
The scope of the problem in Connecticut is limited to approximately 15 loans where closings may have taken place without the requisite funding. In addition, approximately 140 loans have been approved to close and will not receive funding. New Century has established a dedicated call center for use by borrowers in determining the status of their loan or for any inquiries regarding their loan. The telephone number is 877-481-6702.
In an effort to accomplish closing and funding of its pipeline, New Century is trying to place loans with several large national lenders. The Connecticut Department of Banking has reached out to the Connecticut Association of Mortgage Bankers, who has agreed to notify its lenders of this situation and to determine if any are interested in reviewing borrower files.
Commissioner Pitkin stated, “Today’s action against New Century and Home123 is yet another indicator of the deterioration of the subprime mortgage market. The Department of Banking continues to monitor this activity with its primary concern being the protection of Connecticut borrowers.”
The Connecticut Department of Banking worked with a number of other state bank regulators, including the majority of states in the Northeast. A copy of the complete order is attached for your review.