AG Dann will review troubled business' practices

John O'Brien Mar. 29, 2007, 3:38pm


CLEVELAND - New Century Financial Corp. has agreed to let Ohio Attorney General Marc Dann review all documents concerning the company's pending foreclosure actions.

Dann is worried that some of New Century's actions may be violating Ohio law and recently filed suit against it. On March 14, an Ohio judge issued a temporary restraining order that prevents New Century from soliciting consumers for broker services or mortgage loans, accepting loan applications and fees to process loans, pursuing foreclosures and evicting consumers.

"New Century has taken a good faith step by agreeing to let us review its documents before any further foreclosures are acted upon in Ohio," Dann said. "The time has come to stop the rampant disregard for Ohio's consumer laws.

"I want to make sure consumers are in a mortgage loan they can afford and not one agreed to under false pretenses."

Dann said each foreclosure will be examined for evidence of predatory lending practices. If one is discovered, the company must honor a stay for that consumer's loan until it makes corrective measures approved by the State.

New Century is the largest independent subprime lender in the country, though it was recently delisted by the New York Stock Exchange. The company, based in Irvine, Cal., is apparently creeping closer toward bankruptcy, complaining of more than $8 billion in obligations that it can not fulfill.

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