From the NJ Department of Banking and Insurance:
DOBI issues cease and desist order against mortgage lender
The New Jersey Department of Banking and Insurance issued legal documents Tuesday ordering New Century Mortgage Corp. to stop doing business in the state and took the initial step toward revoking the company’s mortgage lender licenses.
The cease and desist order and order to show cause were issued against the company’s two operating subsidiaries, New Century Mortgage Corp., headquartered in Irvine, Calif., and Home123. The companies were ordered to immediately stop taking loan applications, stop closing loans that they are unable to fund, and present evidence as to why the New Jersey licenses of the two entities should not be revoked.
New Century is the nation’s second largest sub-prime lender, and is among the top five mortgage lenders in New Jersey. The company has been experiencing difficulty in securing financing for mortgage operations, leaving several New Jersey home buyers with approved loans but no funding. The New York Stock Exchange suspended trading of New Century shares on Monday.
According to the court documents, New Century has closed on 59 home loans in New Jersey that are not funded, while Home123 has an additional eight. New Century has taken an additional 451 applications that have not closed, while Home123 has 293.
“Protecting the interest of consumers remains our top priority, and that necessitates this course of action,” said DOBI Commissioner Steven M. Goldman. “We are working aggressively to refer consumers to the appropriate industry associations in an effort to assist consumers in reaching other lenders, and will pursue every possible remedy for borrowers who have applications pending with these companies.”
Goldman advised consumers who have recently submitted an application with New Century or Home123 to contact their mortgage broker and ask them to find a new lender.
The cease and desist order can be found here:
http://www.state.nj.us/dobi/acrobat/e07_0231.pdf
From the Record:
N.J. tells mortgage lender to stop
The state Department of Banking and Insurance said Wednesday that it ordered New Century Financial Corp., the nation’s second-largest subprime lender, to stop doing business in New Jersey and has begun a seldom-used legal procedure to revoke its mortgage-lending license.
State officials are trying to find other lenders to take over loan deals that Irvine, Calif.-based New Century could not complete. Hundreds of would-be New Jersey borrowers were left in the lurch by the cash-strapped institution, which until recently was one of the top lenders in the state.
New Century, which has said it stopped accepting new loan applications due to a severe credit crunch, has failed in recent weeks to fund 59 home loans in New Jersey that were approved and closed, state regulators said. In addition, a New Century subsidiary called Home123 has closed eight loans that were not funded.
The mortgage company has said it may not be able to stay in business without new sources of cash.
New Century also has 451 New Jersey loan applications stalled in the pipeline, and Home123 has 293 loan applications in limbo.
For the past two weeks, no one has been answering the phone at New Century’s main New Jersey office, which is in Woodcliff Lake, and the company representatives at its California headquarters have not returned The Record’s calls.
…
New Century is one of the top five mortgage lenders in New Jersey in dollar volume, along with H&R Block, Countrywide Financial Corp., Ameriquest Mortgage Co. and GMAC Mortgage Corp., Gardner said.