New Century Plans Big Cutback in NJ Lending

New Century Mortgage Corp., Irvine, Calif., has announced that it expects to make 60% fewer loans in New Jersey after the state's predatory lending law takes effect Nov. 27.The subprime lender said the new law will reduce access to mortgage financing for thousands of New Jersey borrowers, price many prospective homebuyers out of the market, and spur higher interest rates for loans covered by the law. "New Century will reduce purchase-money and refinance lending in New Jersey because the new law will significantly undercut the secondary market for loans made in New Jersey and creates unacceptable legal and reputational risks," the company said. "Secondary-market investors, who purchase substantially all of New Century's loans and thus free up the company's capital for additional lending, previously stopped purchasing New Century's loans in states that passed similar laws." Terry Theologides, executive vice president for corporate affairs and general counsel at New Century, said the company supports "genuine consumer protection statutes," but that the New Jersey law "will harm the very people it purports to help." The company can be found online at http://www.ncen.com.