I want to share our story about New Century Mortgage in order to save other homebuyers the stress and financial burden that New Century caused us due to misleading lies, false promises, and delays of closing in order to pressure us into signing paperwork that was completely different than what we had seen prior to closing. Read our story:
My fiance and myself are first time homebuyers, and we closed on our new home on August 27, 2003. Our realtor, Shannon Tiger of Perry & Company, worked with us into getting under contract for our house.
We had had consultations with three mortgage lenders, and decided upon working with Robyn Young of Diversified Lending Mortgage, as she was a long time friend who offered to waive the normal commission that we would have otherwise paid with the other two lenders.
On July 22nd, we looked at the property and decided to put a bid in on the property. Based upon Shannon Tiger's advice that there was another bidder on the house, we decided to bid $225,000, the asking price for the house, asking the seller to pay for the closing. Before submitting our bid, we spoke with Robyn Young about getting a loan approval on $225,000, as the previous approval we had was for $220,000. She then sent us a good faith estimate that stated that we qualified for a loan of $225,000 at a 5.99% interest rate for a 30-year term. Upon getting the numbers of our total monthly payments, and the rate we would qualify for, we then submitted the bid on the house based on those numbers that we felt comfortable with.
The seller made a counteroffer, asking that we pay the full asking price and the closing costs, and we accepted on July 23, 2003. Our contract stated that we were to have a Loan Commitment deadline of August 18th. We then worked with Robyn Young in getting all of our bank, tax, financial and Verification of Rent paperwork together for submittal to underwriting. Robyn was working with an account executive, Felix Kamanairira, of New Century Mortgage, who stated that New Century could get an approval of a 5.99% fixed rate loan for $225,000. We signed the final loan application, with those terms stated, and Felix stopped by Diversified Lending to pick up all of our paperwork to be put into underwriting on Friday, August 8th, 2003. We were then assured that New Century would contact us if there was anything else needed to complete the underwriting of our loan.
The loan commitment deadline of August 18th passed, and the lender did not notify us that there was any change in the original terms of the loan. The closing date was set to be on the Monday, August 25th, at 10:00am. On August 21st, I received a Federal Truth-In-Lending Disclosure Statement from New Century Mortgage in the mail. The numbers were incorrect on the paperwork, which alarmed us. The paperwork stated that we were to be receiving financing for $217,855.70 at an APR of 7.076%.
Worried, I called Diversified Lending Mortgage to find out why the numbers were incorrect. Robyn Young was out of the office, and I spoke with Marty, the owner, who advised me that the New Century Mortgage was required by law to send the disclosure papers, and that the numbers were often inaccurate due to their not having the full information of the loan at the time of the paperwork being mailed to us. I thought this was strange, so I called New Century Mortgage directly. I was given Carmen Dreyer's contact, as she was in charge of our account, and left her a voicemail on August 21st.
I didn't hear back from her, so the next day (Friday, Aug 22nd) I called her again, and left another message, asking her to call me back as soon as possible due to the incorrect numbers that were stated on our disclosure paperwork. She never returned my calls. I contacted Robyn Young directly on her cell phone, explaining that I was worried about the loan being correct, especially since the closing was set to be first thing on Monday morning, and I wanted to see the proper paperwork prior to the closing. She, too, assured me that the disclosure papers are often wrong, and not to worry about it. She then called Felix with New Century, who faxed over the final approval for the loan to the Diversified Lending offices, and he stated to her that we qualified for the 5.99% 30-year fixed rate on $225,000. I was faxed this approval, which had the numbers that I was expecting to see-- $225,000 at 5.99% for a 350 Term, and a 2 year pre-pay stated. I was confident that we had the right loan, and Robyn felt confident we would be closing on Monday.
Late Friday afternoon, New Century Mortgage contact Diversified Lending, as they had not received the Tax paperwork that was supposed to have come along with the Title paperwork. The Title company was contacted, and the paperwork was requested to be faxed to New Century so that they could finalize the loan. The Title company could not get the paperwork to New Century in time, and that we could not close on time. The seller was contacted, and the closing was postponed to the following day, Tuesday, August 26th, for 4:00pm.
On Tuesday late morning, New Century Mortgage requested more information from us, as the Verification of Rent agreement signed by our landlords was not sufficient as our landlords were not a rental company. New Century wanted to see 12 months worth of cancelled checks to verify our rent payment history. I immediately gathered the bank paperwork, and faxed it to Diversified Lending who delivered it to New Century. This delayed the closing further, as the underwriters then had to process that paperwork and could not get it done before the 4:00pm closing time.
Around 3:00, we were notified that the closing would be pushed off again. The seller's realtor contacted Shannon, and told her that if we did not close the next day at 11:00am, that the seller would back out of the contract, and that the contract was broken due to the closing date having been missed. Shannon and her boss, Bob, contacted us letting us know that we were in violation of our contract.
I was in a panic at this point, as everything seemed to be going so badly, and I was worried since I was told that we had broken our contract, even though we had done everything we were asked. I called Robyn and she assured me that everything would be complete and ready for the 11:00 deadline. She was in touch with Felix, who said that the paperwork would be ready. At the end of the day on Tuesday, Robyn was contacted by New Century who said that the underwriting was complete, and that the paperwork was faxed to the Title Company and that the closing in the morning would be fine.
On Wednesday morning on the 27th, Todd and I arrived at the closing. The Title Company's representative, Kathy Burrows, began to walk us through the loan paperwork. We signed the final loan application from New Century Mortgage, which stated that it was a Conventional, Fixed Rate loan at 5.99% for $225,000. After signing some other paperwork, Kathy then presented us with the disclosure paperwork, including an Adjustable Rate Mortgage Disclosure that we had never seen before. Stunned, I called Robyn Young at Diversified Lending, and told her that the loan paperwork was for an ARM, which had never been discussed or acknowledged prior to this moment.
She then called Felix at New Century, who advised her that it was a mistake, and that we were indeed to be getting a fixed rate loan, not an ARM. She called us back, and advised us that the new paperwork would be faxed as soon as possible. Kathy spoke to the Title Company, discussing that new paperwork was on its way. Twenty minutes later, Robyn called, upset, with Felix on the line, and asked him to tell me what he just told her. He said that yes, he had told Robyn that it was a fixed rate, but it was no longer so, it was an ARM. The ARM terms were that we were to be locked into a 5.99% interest rate for two years, after which the loan could go up (but never down) 1.5% every six months and never be greater than 12.99%.
The only two terms that were the consistent with the paperwork we signed prior to closing was the interest rate (5.99%) and the original pre-pay penalty, preventing us from refinancing for two years. In addition, the original closing cost total that I was given that morning based upon the paperwork from New Century was incorrect, as they added an additional Processing Fee of $350.00 to the paperwork we saw at closing, so I had to write another check to cover the additional fee.
Robyn told me that there was nothing we could do at this point, and that if we didn't sign the papers, we would "loose everything." Still stunned, Todd and I discussed our options. We consulted Shannon, who told us that if we didn't' sign the paperwork, that we would lose the house and our earnest money. She told us repeatedly to "just sign the paperwork." Everyone at the table was angry with the entire situation, as the closing was already postponed two times, and the seller stood by his statement that if we didn't close now, then he would back out of the contract.
Upset and confused, we felt we had no choice but to sign the paperwork in fear that we would lose everything if we did not. We finished the closing, and signed the paperwork.
Afterwards, when I arrived back at home, I called Robyn immediately to find out what had happened. She was still upset, and was in the process of contacting New Century's district manager, Tim Lambert, as well as Felix, trying to find out what had happened, and why the loan was completely changed. They told her that they would look into refinancing us into a fixed rate loan, as originally promised, but to this day they have not notified us of any change or resolution to the problem.
I have also contacted Felix Kamangirira directly, and told him that if we had simply been notified by August 18th that the loan was an adjustable rate loan, we could have then had the choice to back out of the contract. If we had had time to discuss this option, then we could have made an informed decision. Instead, we were pressured into making the decision at the closing table. He said that he never intended us to be in this situation, and that he would do everything he could to get it resolved. Felix said that he was looking into a resolution to the problem, and that he would contact me as soon as he heard of anything.
Todd and I made it clear to Robyn Young from the beginning that we did not want an adjustable rate loan. She recommended several, but I told her that we would not want to buy the house if we had to get into an ARM to do it. I knew that the current rates could realistically be the lowest that we could see, and wanted to get us into a fixed rate now, as this was our best chance to get a good fixed rate. Now we are not only in an adjustable rate loan, but the rate starts us at the 5.99% rate, which is a fixed-rate interested rate -- the ARMs that Robyn had mentioned were starting us at 4.25%!
I am in the process of speaking to lawyers, but cannot afford to pay one to help us fight this injustice. I have also spoken with the Association of Mortgage Brokers, who told us that because Colorado doesn't require Brokers to be licensed, and that there was little they could do to help us. We are worried sick over the possibility that in two years our interest rate could go up 1.5% twice yearly, and if it does, there is a good chance we won't be able to afford our monthly mortgage payments, as they are already tight as it is. Our hopes were that we could stay in this house for at least 5 years, if not longer, but now I fear that we might have to try to sell the house if we can't refinance into a rate we can afford come two years when our pre-pay penalty is lifted.
I feel that New Century Mortgage should be responsible for this wrongdoing. As first time homebuyers, we were convinced to sign into a ARM loan that we were not aware of until we were at the closing table. If New Century had simply communicated that the loan was an ARM prior to our loan commitment deadline, or even before closing, we could have decided to not purchase the house, or found another loan program that would be more acceptable. New Century's complete misrepresentation of our loan terms is unacceptable.
Since then, New Century has done nothing to resolve their mistake, and I don't foresee any changes in the future. My advise to everyone out there is to AVOID NEW CENTURY MORTGAGE for ANY type of loan! Hopefully others will learn from our mistake, and work with an ethical company instead!
OTHER CONTACT INFO:
Robyn Young, with Diversified Lending Mortgage, who brokered us a loan with New Century Mortgage Corporation: 720.488.1824
Felix Kamanairira, Loan Officer/Account Executive with New Century Mortgage: 303.434.5136
Tim Lambert, Manager with New Century Mortgage: 720.559.4848
New Century Mortgage Corporation
P.O. Box 11052
Orange, CA 82586-8052