Banking Department issues enforcement actions against New Century Mortgage
March 15, 2007
New York – The New York State Banking Department issued two enforcement actions Tuesday ordering New Century Mortgage Corporation to cease doing business in the state. The Department also suspended the license of the national mortgage lender.
The Cease and Desist and Suspension orders require the company to immediately stop taking loan applications, to establish and maintain an escrow account to fund loans for which New Century Mortgage has pending applications, and to provide the Department with daily updates on its ability to fund loans made to New York consumers.
New Century Mortgage is the nation’s second largest sub-prime lender. The company notified the Banking Department on March 12, 2007 that it only had sufficient funding for one day and that without additional financing it would be unable to fund loans after March 13.
According to company reports submitted to the Department, New Century Mortgage closed on 121 loans, totaling more than $39 million in New York that are not funded. The company has taken an additional 1994 applications, totaling more than $647 million that, at the time of the order, had not closed.
“New Century Mortgage’s inability to fund loans that it closed could pose significant harm to New York’s consumers,” said Richard H. Neiman, Acting Superintendent. “Consumer protection is a priority for this Department and we are working closely with other state regulators and with mortgage industry associations to try and remedy this situation.”
The Banking Department advises consumers who recently submitted an application to New Century Mortgage Corporation to immediately contact their mortgage broker and ask them to identify a new lender for their loan. Consumers may also call New Century Mortgage directly at (877) 481-6702.
Additional information will be posted to the Banking Department’s Web site as it becomes available. Consumers may also call the Department’s Consumer Helpline at (877) BANK NYS with questions.
The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $1.5 trillion.