• Report: #146527
Complaint Review:

New Century Mortgage

  • Submitted: Fri, June 17, 2005
  • Updated: Sat, June 25, 2005

  • Reported By:Seattle Washington
New Century Mortgage
1111 3rd Ave City Of Orange, California U.S.A.

New Century Mortgage Did a New Century Mortgage Broker Ripp You Off Too? City Of Orange California

*Consumer Suggestion: New Century is a large sub-prime lender...

*Consumer Comment: As a broker I have used New Century

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We just wanted to refinance our Seattle home & take a little equity out to help out on some home improvement projects and the mortgage broker put us with New Century Mortgage. The rate was higher than what we thought it should be & I guess I was not paying attention. I contacted Americaswatchdog to have them look at the paperwork and I about blew a gasket. The broker lied to us about the rate (too high) and as it turned he got a kick back called a "yield spread premium" of $7650 for doing this.

And now we learn that New Century is even giving brokers an extra bonus to do their loans. Could anyone write about this or even a broker tell us about New Century. I know the people at Americaswatchdog are going after them and we want to get an attorney to look into this for us. But we think this is nationwide & not just limited to Seattle as the company is one of this countrys largest sub-prime mortgage lenders. We just found out about this sub prime term too.

It will be great to see what you say

Seattle, Washington

This report was posted on Ripoff Report on 06/17/2005 07:22 AM and is a permanent record located here: http://www.ripoffreport.com/reports/new-century-mortgage/city-of-orange-california-90024/new-century-mortgage-did-a-new-century-mortgage-broker-ripp-you-off-too-city-of-orange-ca-146527. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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Updates & Rebuttals

#1 Consumer Suggestion

New Century is a large sub-prime lender...

AUTHOR: Steve - (U.S.A.)

New Century didn't rip you off!

Your broker placed your loan at New Century because he could not get you approved for a conventional, conforming loan. Something about the combination of your credit scores,loan to value, debt ratios, loan amount made your loan outside of the Fannie Mae guidelines.

I broker loans to New Century 1-2 times a month for transactions that require them. They do a terrific job of getting loans done on time with a minimum amount of hassle to me or the homeowner.

READ THIS CAREFULLY....The BROKER specifies how much YSP they want to make!!! New Century just pays what the broker builds into the loan.

A previous poster said they they have a maximum YSP or "rebate" that can be paid to brokers. That is correct; it is 2% of the loan amount. That is how a broker makes money. On top of that, he could have charged you an origination of maybe 1%.

If your broker did your loan for "free", you probably would have gotten an interest rate of 1% to 1 1/2% lower.

New Century didn't screw you. If you have a problem with the fees of YSP go talk to your broker. I guarantee you THEY charged you this money, not New Century.
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#2 Consumer Comment

As a broker I have used New Century

AUTHOR: Jennifer - (U.S.A.)

A yield spread amount of over $7000 is unthinkable out here in Illinois! I am a mortage loan officer and I can tell you I have never seen such a thing but then again the homes are not nearly as pricey as they are in California.

I am curious, were you charged any fees upront? How big was the loan? I also broker to New Century and they are usually pretty conservative with the yield spread they pay and I have never heard of any bonus from them so that may be a California thing. Unless the size of your loan was close to a million dollars, you most likely could have gotten a rate a little lower but not a whole lot. New Century is a lender we use for the type of loan that does not meet conventional requirements such as credit score being low or the LTV being high. Your loan officer should have explained all this. However, the yield spread is not always paid to them. I dont think he turned a profit of $7000, it is usually a percentage of that after certain corporate charges are taken out.

Yes , I would have to say chances are good your rate is a little higher than you could have paid but under certain circumstances such as loan amount it may have been average.
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