New Century Recieves C&D Well you heard here first but now it's official, Irvine based New Century has received a Cease and Deist order from the State of California and Fannie Mae will stop buying their loans.

It's apparent that the chicanery over at New Century has gone well beyond simply foreclosures on the sub prime market.

"The filing also said the company has received cease-and-desist orders from California. The state alleges that New Century illegally failed to fund mortgage loans after closing."

Someone is going to jail.

Labels: Corp, fraud, Mortgage, Newcentury., NewCenturyFinancialCorp

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Defaults begin sink companies To quote Queen, "Another bites the dust". This time the mortgage company going under is Irvine based sub prime provider, New Century Financial Corp. It's creditors have cut it off as the defaults in the continue to rise. What's more telling is the percentage of sub prime loans, and their marketshare have skyrocketed in the last three years, going from 6% of the market to 22% of the market. Foreclosures and defaults will have a ripple effect throughout the California housing market.

The so-called sub-prime lending industry that specializes in loans to risky borrowers has been tormented for months by soured loans, creating huge losses and forcing about three dozen large lenders to be sold to other companies, to file for bankruptcy protection or to close operations altogether.

On Monday, New Century announced that the Wall Street firms that supplied its funding had either cut off fresh capital or were poised to do so, leading some industry observers to say bankruptcy was likely. The company's stock plunged $1.55, or 48%, on Monday to $1.66 before the New York Stock Exchange halted trading.

Less than a year ago, New Century shares were worth nearly $52 each.

As New Century's stock sank, those of other sub-prime lenders suffered too. Santa Monica-based Fremont General Corp. fell $1.30, or 16%, to $6.73. The firm said last week that it would exit the business under pressure from regulators.

Homebuilder shares also stumbled on fears that they will have fewer customers. Hovnanian Enterprises Inc. fell 6% and Pulte Homes Inc. dropped nearly 5%.

This is likely affect other mortgage providers with less exposures and will lead to a much needed tightening of lending standards. This will exert a downward pressure on California homes in several ways. First of expect more distressed sales of homes, secondly expect fewer offers on your home for sale since their will be fewer buyers competing for it.

Labels: CA, California, Mortgage, NewCenturyFinancialCorp, Subprime, subprimemortgagecalifornia

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See No Evil Seeking Alpha has a bubble tracker and round up. Remarkably people who have a vested interest in saying things are GREAT continue to do so. Here's a great one from Idaho, ""Sales of single-family homes in the Treasure Valley in January were off 27% from Jan. 2006," yet according to Don Hubble of Hubble Homes, "We're optimistc." Talk about cognative dissonance.

Here's another report - this time in California in the Central Valley with an expert saying the housing bubble has adjusted

"The foreclosure market in California and the nation in 2007 may not be quite as intense as it was last year but many home buyers who used creative financing to get into their homes are still in danger of foreclosure, says Serdar Bankaci, founder and president of Default Research Inc. of Mt. Pleasant, Pa."

Look at that lead... "may not be quite as intense"? Based on what data? Let's take a t the actual data. Here's a great post at the OC Register
"RealtyTrac from Irvine reports ....

"California’s foreclosure total of 14,430 was the nation’s second highest and represented a 14 percent increase from the previous month. The state’s foreclosure rate of one new foreclosure filing for every 846 households registered slightly above the national average and 14th highest among the states."

So instead of cooling down - the foreclosure rate is actaully INCREASING in California.

Labels: CA, California, Foreclosure, Mortgage, rateinJanuary

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Great new idea in a home mortgage Pacific Trust Bank has just introduced a great new financial device for Californians. Dubbed the "Green Account," it combines the customers checking, savings and mortgage.

The Green Account is a first mortgage line of credit with an associated 'Clearing Account' that allows all types of deposits and withdrawals to be performed, including direct deposit, check or debit card, ATMs transactions, ACH debits and credits, and transactions through the Bank's Internet banking and bill payer service. This type of total financial picture mortgage originated in Australia and is quite common there.

In addition to its transactional features and financial management simplicity, the Green Account's primary benefits are:

-- liquidity and accessibility to your equity;
-- cash management flexibility; and
-- the ability to minimize the outstanding loan balance and finance
charges.

Accounts like this account for nearly one third of all mortgages in England and Australia.

This gives a mortgage holder a great deal of flexibility in managing their finances. Pacific Trust Bank is a small financial institution but this is a highly innovative financial product. The credit limit on the account is up to 80% of the value of the home and a total home value of $2.5 million. Interest is calculated every day on this product as opposed to monthly.

For people interested in this product, contact Pacific Trust Bank
Hans Ganz
Phone: (619) 691-1519, ext. 4000

Labels: californiamortgage, greenaccount, Mortgage, PacificTrustBank

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Initial launch Given the way the California Real Estate market has heated up over the last 5 years, I thought I would start a site to extensively cover changes in the market. So here it is.

Labels: CA, California, CAMortgageNews, Mortgage

  ¶ Initial launch 1 Comments