EquityScout.com :: Real Estate Investment Blog

MONDAY, APRIL 02, 2007

New Century Mortgage throws in the towel

It seems a bit anticlimactic now, but New Century Mortgage Corporation have declared bankruptcy according to an announcement today on their website.

As a sidenote: I always find it odd that companies don't clean up their website when they end up in this situation. You can still find out about New Century's groundbreaking products and even apply for a job of you're so inclined. Go figure.

Tags: sub-prime lenders, new century financial,

Add to:

(5)

posted by: Chris Smith

Comments

Jonathan Greene

April 02, 2007

09:03 PM

And another one bites the dust....

James Klobasa

April 03, 2007

06:36 PM

Yep, another bites the dust...I've been reading about this, this morning at a few different sites. Seems the big guys took a bit of the bite, but as usual the little guy will hurt most.

Christohper Smith

April 04, 2007

12:00 AM

Yeah the big guys took a bite, but not much. Top executives at New Century won't be filing bankruptcy anytime soon - over the past few years they took home millions in salary and options. Unfortunately, I can't say the same for the thousands of poor schmuck New Century employees who are now tidying up their resumes and looking for a new job. Or the homeowners who were at the receiving end of the high risk loans they were aggressively peddling. You’re right, James; the little guy usually gets the worst of it in the end.

MajesticMortgage Rep

April 04, 2007

12:02 PM

New Century was one of our best lenders to work with. Everyone keeps talking about high risk loans they were pushing, but New Century had a prime lending division also (old RBC mortgage) which had great rates and very good programs for more realistic guidelines for the average working joe. Majestic mortgage has not had a singe default of the loans we sent to New Century mortgage. We make sure our buyers know what they are getting into and what the payment will be now and in the future. Mortgage defaults I believe originate with the originator, If we market teaser rates and sell people loan products that pay us the most money then the client suffers, and I think a high percentage of loans in default (residential mtg's) are due to an inappropriate product placement from the originating lender. Client first - money comes later.

Christopher Smith

April 04, 2007

12:53 PM

Majestic, interesteing to hear a different take on the story. I'm not familiar with their prime lending division, but good to hear that they had at least one satisfied customer. But without a doubt New Century was a sub-prime company w/ a prime segment. Liquidity in the sub-prime sector will likely be replaced by larger banks like Citigroup and Countrywide for whom subprime is a small part of their business. This, in my view, is probably a good thing - they'll be interested in the potential profitability of the sub-prime market, but their wariness of the reputation risk associated w/ dodgy standards will make them more likely to toe an ethical line. But...we'll see.