AG eyes on New Century Oversight of Foreclosures to Weed Out Predatory Lending Violations

CLEVELAND ~ To protect consumers from unconscionable acts and potential foreclosures, New Century Financial Corporation has agreed to stop all foreclosures pending a review by the Ohio Attorney General’s Office and the Department of Commerce’s Division of Financial Institutions. The injunction allows the Attorney General to review all of New Century’s pending foreclosure actions and delinquent loans to determine whether the loans violate Ohio law. “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,” Attorney General 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.”

During the review process, each foreclosure will be examined for evidence of predatory lending practices. If bad business practices are discovered, New Century will be obligated to honor a stay for that consumer’s loan until the company makes corrective measures that are approved by the State. One option might be reworking the original loan to make it affordable for the consumer.

Per the stipulated agreement: “Both parties agreed that all borrowers with loans originated or serviced by New Century who desire to bring their loan current to avoid foreclosure sale should continue to make all mortgage payments and that all borrowers with loans originated or serviced by New Century which are not delinquent should continue to make all mortgage payments. Borrowers, or any person authorized to assist the borrower, should contact New Century to discuss a solution to their foreclosure case.”

The injunction was filed in Cuyahoga County Common Pleas Court.