Subprime Mortgage Lender New Century Dumped From S&P Index
Source: Ruth's Chris to join S&P SmallCap 600, reported at BusinessWeek.com
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Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Over the last few years, given the high rates of property appreciation, the upfront fee and the equity skimming operator scams have not been as prevalent since it was preferable for an operator to just position itself to get most or all of the equity appreciation in the property from a homeowner facing foreclosure by offering a sale leaseback program that I have referred to in other posts.
But because of the general downturn in real estate values, and the increase in delinquencies in mortgages secured by property with little or no equity, it seems clear to me that the use of the sale leaseback programs will diminish somewhat in the next couple of years and, instead, the "upfront fee" operators and the "equity skimmers" will be "coming out of the woodwork."
So, the next time you hear a story about the troubles in the subprime mortgage market, don't think that there isn't any connection between it and the foreclosure rescue industry. (Also, don't be surprised if you begin noticing some of the mortgage brokers and loan officers who were once fraudlently peddling subprime mortgage loans "drift" into the foreclosure rescue business as "mortgage consultants", "mortgage workout specialists", or equity skimmers.)
By the way, for another story on the subprime mortgage disaster, see Mortgage Crisis Spirals, and Casualties Mount, reported in yesterday's New York Times.
and Lenders take beating in subprime fallout, reporting that New Century Financial Corporation lost 60% of its market value yesterday.
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For an article describing the relationship between the subprime mortgage lenders and the large banks who provide them with the necessary financing to enable the making of subprime loans, see Big banks control fate of subprime lenders (Merrill, J.P. Morgan pull back in credit crunch at low-end of mortgage market)
Postscript:
In what appears to be a class action attorney "race to the courthouse" against New Century Financial Corporation, see these recent press releases:
(These four links no longer available online. 10-19-07)
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Fremont's announcement comes on the heels of Freddie Mac's announcement that it would tighten its mortgage lending underwriting guidelines on "exotic" home loans.
The signs of trouble in the industry continue.revised 2/2/07 (12:26pm)
.(Editor's Note: I hope that some day soon the New York State Bar Association starts initiating administrative proceedings against some of its members before criminal charges are brought against its members. I hope I'm wrong, but my suspicion is that the state Bar Association only acts when reports of criminal charges are made public. In my view, the more time that passes before the state Bar Association starts initaiting and reporting on investigations of its members, the longer they maintain the appearance to the general public that they are all "asleep at the wheel".
Maybe they should impose bonding requirements on attorneys handling real estate transactions. I reiterate, however, that I hope I'm wrong, but even if I am, the New York State Bar Association still looks terrible with all these recent media reports coming out on some of its wayward members that reflects poorly on the entire profession, in my humble opinion.)
For those ripped off by an unscrpulous New York attorney and want to try getting some of your money back, check out The Lawyers Fund for Client Protection of the State of New York.
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For other links to information on the troubled sub-prime mortgage market, see Sub Prime Mortgage Market Compared To "The Titanic".
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It may be that asserting claims under California's equitable mortgage doctrine by a California homeowner involved in a foreclosure rescue situation may be an alternative approach (rather than making claims under California's Home Equity Sales Contract Act) in seeking relief in a court of law. equitable mortgage zebra