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New Century Financial Contact Information

Corporation New Century Financial Corporation

3337 Michelson Dr., Ste. CN-350
Irvine, CA 92612
CA Tel. 949-517-0000
On the web: Fax 508-651-6114

It's the end of an error for New Century Financial. The nation's largest subprime
mortgage lender and real estate investment trust (REIT) got caught in a wave of defaults
brought on by the 2006 housing bust. The REIT ceased making new loans, filed for
Chapter 11 bankruptcy protection, and sold its loan-servicing unit to Carrington Capital
Management. It provided subprime mortgage loans mainly for single-family homes. Its
wholesale division, once nearly 90% of sales, operated through a network of 35,000
independent mortgage brokers; its retail unit marketed loans directly to individuals via
more than 200 offices in 35 states. New Century sold many of its mortgages in pools of
loans to institutional buyers.

President and CEO: Brad A. Morrice
EVP and CFO: Taj S. Bindra
Director Media Relations: Mortgage & Investment REITs

New Century Financial Corporation Pink Sheets: newxq was founded in 1995 by a trio
of former managers at Option One Mortgage, including current Chief Executive Officer
Brad Morrice, and is headquartered in Irvine, California. New Century Financial
Corporation is a real estate investment trust that originates mortgage loans in the United
States through its operating subsidiaries, New Century Mortgage Corporation and
Home123 Corporation.

As of January 1, 2007, New Century Financial Corporation had approximately 7,200 full-
time employees[1] and a market capitalization of $1.75 billion. FY 2005 net income was
$417 million.[2] New Century was formerly listed on the New York Stock Exchange and
is now trading on the over the counter pink sheets. By March 14, 2007, the day after the
New York Stock Exchange delisted New Century Financial Corporation, the market
capitalization value of its stock was less than $55 million.

Subprime Mortgage Lending Activities

As of January 1, 2007, New Century Financial Corporation was the second-biggest
subprime mortgage lender in the United States, and was headed by Brad Morrice,
President and CEO. Fredric J. Forster, a lead independent director, served as a non-
executive Chairman of the Board. Subprime mortgage loans are riskier loans in that they
are made to borrowers unable to qualify under traditional, more stringent criteria due to a
limited or blemished credit history. Subprime borrowers are generally defined as
individuals with limited income or having FICO credit scores between 500 and 620 on a
scale that ranges from 300 to 850. Subprime mortgage loans have a much higher rate of
default than prime mortgage loans and are priced based on the risk assumed by the

To help promote the company, New Century's Home123 division used Bob Vila as an
advertising spokesman. It also entered into a sponsorship deal with NASCAR and helped
sponsor the Chip Ganassi Racing with Felix Sabates team, occasionally appearing on the
#42 race car driven by Jamie McMurray. (McMurray has since left for Roush Fenway
Racing and the #26 team.) They also sponser sportcar racer Cort Wagner

Financial difficulties, bankruptcy and criminal

On March 8, 2007, New Century Financial Corporation said that it has stopped accepting
loan applications because some of its financial backers are refusing to provide access to
financing. New Century Financial Corporation also said that it has received $150 million
worth of margin calls from its warehouse lenders. "As a result of the current constrained
funding capacity, the company has elected to cease accepting loan applications from
prospective borrowers effective immediately, while the company seeks to obtain
additional funding capacity," New Century Financial Corporation said in a statement.
New Century Financial Corporation also said that one of its financial backers has
demanded that the company repurchase some loans pursuant to repurchase provisions
contained in loan purchase agreements.

On March 9, 2007, New Century Financial Corporation reported that it had failed to meet
certain minimum financial targets required by its warehouse lenders and disclosed that it
is the subject of a federal criminal investigation. New Century Financial Corporation
further indicated that it does not have the cash to pay creditors who are demanding their

On March 12, 2007, the New York Stock Exchange said in a statement it halted trading
of New Century Financial Corporation while it decides whether to keep listing the
company's securities in light of the liquidity problems. The stock of New Century
Financial Corporation has lost approximately 90 percent of its value since the start of
March 2007 on news of growing defaults and problems getting new financing.

On March 13, 2007, New Century Financial Corporation reported in a regulatory filing
that it has received a grand jury subpoena from the U.S. Attorney's Office for the Central
District of California as well as a letter from the Securities and Exchange Commission
notifying the company of a preliminary investigation. The filing stated that the U.S.
Attorney's office indicated in a letter dated February 28, 2007 that it was conducting a
criminal inquiry in connection with trading in the company's securities as well as
accounting errors regarding the company's allowance for repurchase losses. The filing
further stated that the Securities and Exchange Commission has requested a meeting with
the company to discuss the company's previous announcement that it would restate
certain financial statement.

On March 20, 2007, New Century Financial Corporation said that it can no longer sell
mortgage loans to Fannie Mae or act as the primary servicer of mortgage loans for the
government sponsored enterprise. In a filing with the Securities and Exchange
Commission, New Century Financial Corporation said that Fannie Mae terminated "for
cause" a mortgage selling and servicing contract with it citing alleged breaches of that
contract and others. New Century Financial Corporation said it received a notice of
breach and termination on March 14, 2007.

New Century Financial Corporation further said that it has received "cease-and-desist"
orders from California, that it has entered into consent agreements with Florida and
Washington state regulators, and that New York's banking department has suspended the
banking license of its Home123 Corporation subsidiary for up to 30 days.

On April 2, 2007, New Century Financial Corporation and its related entities filed
voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court, District of Delaware located in Wilmington,
Delaware. New Century Financial Corporation listed liabilities of more than $100
million. New Century Financial Corporation also announced that the employment of
about 3,200 people, more than half the workforce, will be terminated. New Century
Financial Corporation said in a statement that it has obtained $150 million in financing
from CIT Group Inc. and Royal Bank of Scotland Group Plc's Greenwich Capital unit to
use as its bankruptcy case moves through the court process. The company said it plans to
sell most of its assets within 45 days of the bankruptcy filing.

The Bankruptcy Cases for New Century Financial Corporation and its related entities are
pending before the Honorable Kevin J. Carey in the United States Bankruptcy Court,
District of Delaware and will be jointly administered under Case No. 07-10416. The First
Day Hearing was scheduled for April 3, 2007.

On April 16, 2007, a petition by the U.S. Department of Justice was filed with the
bankruptcy court, requesting to hand over the management of the company to a court-
appointed appointed trustee. The USDOJ claimed in its petition that there were signs of
ongoing self-dealing by company executives and directors. The creditors' committee
opposed this request, and it was ultimately denied.

On May 25, 2007, they filed their form 8-K [1], a day after stating that they "...probably
overstated 2005 earnings." [2]

On June 8, 2007, New Century Financial warned that its effort to liquidate assets could
be stymied if General Electric Capital is allowed to proceed with plans to seize computers
and other equipment it leased to the bankrupt housing lender. GE Capital, arguing that
New Century owes it $8.7 million on leased equipment and can't stay current on
payments, has asked a judge to lift the protection normally granted to companies in
Chapter 11. That would enable the firm, a unit of General Electric, to repossess the
equipment, which includes computer servers, and chairs. New Century said that would
disrupt its effort to wind down operations and repay creditors. New Century said "much
of the data and information" involving its assets and business operations, including
accounting information, is stored on the computers, or generated by them. New Century
also said "it is critical for the debtors to use the equipment" so that the loan-servicing
business it recently sold to Carrington Capital Management can be kept "operating as a
going concern." Carrington paid $188 million for the business. The committee of
unsecured creditors in the bankruptcy case also has opposed GE Capital's bid to seize the
computers, saying it marks the third time the company has tried to force New Century to
pay "substantially more" in cash than the value of the equipment.

1. ^ NEW: Profile for New Century Financial Corp. . Yahoo! Finance (2007).
Retrieved on 2007-01-02.
2. ^ NEW: Income Statement for New Century Financial Corp.. Yahoo! Finance
(2007). Retrieved on 2007-01-02.

External links
• Insider trading by New Century executive officers and directors [3].
• New Century Financial Corporation Restructuring Information Web Site. This site
provides information about the company's Chapter 11 restructuring. [4].
• New Century Financial Corporation Chapter 11 Bankrupty Information Web Site.
• Brad Morrice's compansation package [6].
• Fredric J. Forster's bio [7].


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