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News Release

New Jersey Department of
Banking and Insurance

Commissioner Steven M. Goldman

For Immediate Release:
March 14, 2007

For Further Information:
Jim Gardner (609) 292-5064

DOBI issues cease and desist order against mortgage lender

Department seeks legal remedy for home buyers with unfunded loans

TRENTON – 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.

Additional information will be posted on the DOBI Web site as it becomes available. Individuals with questions regarding a loan pending with New Century or Home123 can call the DOBI Consumer Hotline at (609) 292-7272.

More information for consumers... More information for mortgage brokers...


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