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New Century Mortgage & Home 1 2 3 Corp - Consent Agreement and Order

April 3, 2007

The State of Maine, acting through the Office of Consumer Credit Regulation, of the Department of Professional and Financial Regulation (?Office?) has reviewed the business practices of New Century Mortgage corporation (?New Century?) and Home123 Corporation (?Home123?), and its officers, employees and directors. Based on the results of its review, the Office believes that New Century and Home123 operated in violation of the Maine Consumer Credit Code (?Code?), 9-A MRSA 1-101 et seq. and the Funded Settlement Act, 33 MRSA ?521 et seq. The parties to the above captioned matter, in lieu of litigation, hereby stipulate that the following statements are true and correct in the settlement of the above-captioned matter and, intending to be legally bound, hereby agree to the terms of this Consent Agreement and Order (the ?Order?).

BACKGROUND

The Office is the Maine state governmental administrative agency authorized and empowered to administer and enforce the Code and Funded Settlement Act.
New Century is licensed in Maine as Supervised Lender, License No. SLM3335, with 32 licensed branch offices.
Home123 is licensed as Supervised Lender, License no. SLM4780, with 22 licensed branch offices.
New Century and Home123 have their corporate headquarters in Irvine, CA.
New Century and Home123 are the subsidiaries of New Century Financial Corporation that originate and make mortgage loans.
The Office has learned that New Century and Home123 do not have sufficient warehouse lines of credit to fund loans that New Century and Home123 closed or intended to close with Maine consumers.
As of the issuance of this Order, there are still closed and unfunded loans outstanding with Maine consumers.
The Office has learned that the stock of New Century has dropped considerably, and that because of alleged misstatements on its financial statements, New Century is being investigated by the U.S. Securities and Exchange Commission.
New Century and Home123 are in such financial condition that they cannot continue in business with safety to the Maine customers of New Century and Home123 as provided in Section 2-301(a) of the Code

CORRECTIVE ACTION

New Century and Home123 shall immediately cease and desist accepting, from either consumers or mortgage brokers, any applications for residential first or second mortgage loans secured by Maine real property or from Maine consumers. For purposes of this Order, ?Maine consumers? shall include Maine residents or persons who have submitted applications for loans which are, or are intended to be, secured by Maine real property.
New Century and Home123 shall immediately cease and desist from advertising for its wholesale and retail businesses in Maine or to Maine consumers.
New Century and Home123 shall obtain funding for, or place with another lender, loans to Maine consumers that have closed but have not yet been funded.
New Century and Home123 shall either (i) obtain funding for and close or (ii) place with other lenders, applications from Maine consumers to whom loan commitments have been issued.
For loan applications from Maine consumers for which no commitment has been issued, New Century and Home123 shall either (i) obtain funding for and close into loans, or (ii) place with other lenders, or (iii) deny for cause, the loan applications. This Paragraph shall not apply if the Maine consumer or the representative mortgage broker has voluntarily withdrawn the loan application.
New Century and Home123 shall notify all Maine mortgage applicants or the mortgage applicant?s broker of the status of any applications or loans with New Century and/or Home123, and of the likelihood of funding.
New Century and Home123 shall seek out other lenders with whom they can place Maine consumer loans or applications to the benefit of Maine consumers.
New Century and Home123 shall provide to the Office a list each work day of all loans to Maine consumers that have closed but not funded, or loan applications from Maine consumers that have not closed. This list shall be updated as stated above until all Maine consumers have either had their loans funded, or until all issues regarding Maine loan applications have been resolved.

a. This list shall include, but is not limited to:

The names of all Maine consumers who have closed but not funded loans from New Century and/or Home123 or who have submitted an application to New Century and/or Home123 for a loan that has not yet closed;
The address and telephone numbers of the consumers listed in (i);
The loan number;
The amount of all prepaid loan fees submitted;
The amount of each loan;
The current application status;
The rate lock status;
The actual closing dates;
Whether the loan was a purchase or refinance; and
The identification of the applicable lender with whom each loan will be placed, and the contact information for that lender.

b. Any changes in the list shall be explained in writing.

c. The list shall be sent to William Lund, Director, Office of Consumer Credit Regulation, at william.n.lund@Maine.gov and Julie Haefele, Principal Examiner at julie.f.haefele@Maine.gov. by 5:00 PM EST on each business day.

New Century and Home123 shall provide to the Office on a weekly basis with a liquidity schedule that lists the anticipated loans to be closed and the anticipated funding available.
New Century and Home123 shall, as soon as possible, place any fees previously collected from Maine consumers relative to any first or second mortgage loan applications in a separate escrow account maintained at a federally-insured depository institution.
New Century and Home123 shall release any liens filed on any Maine real property or filed on property owned by Maine consumers as a result of a residential mortgage loan that was closed with New Century or Home123 but that has not been funded. In the event that the loan subsequently funds, New Century and/or Home123 may file a lien against the property at that time.
In the event that interest on a Maine residential mortgage loan closed or originated by New Century and/or Home123 starts on any day other than the day of funding, or if there is any change of terms from the signed loan document, New Century and/or Home123 must notify William Lund or Julie Haefele immediately at the contact information provided in paragraph 17(c).
Nothing in this Order shall prevent New Century and/or Home123 from selling or assigning residential mortgage loans to other entity, servicing closed mortgage loans or engaging in other activity not prohibited herein or by the Code or the Funded Settlement Act.' '
New Century and Home123 shall use every best effort to resolve their current inability to fund loans.'

FURTHER PROVISIONS

Consent. New Century and Home123 hereby knowingly, willingly, voluntarily and irrevocably consent to the entry of this Order pursuant to the Office?s order authority under the Code and the Funded Settlement Act, and agree that they understand all of the terms and conditions contained herein. New Century and Home123, by voluntarily entering into this Order, waive any right to a hearing or appeal concerning the terms and/or conditions set forth in this Order.'
Publication and Release. New Century and Home123 consent to the publication and release of this Order.'
Entire Agreement. This Order contains the whole agreement between the parties. There are no other terms, obligations, covenants, representations, statements, conditions, or otherwise, of any kind whatsoever concerning this Order. This Order may be amended in writing by mutual agreement by the Office, and New Century and Home123.
Re-negotiability. New Century and Home123 may, given a change in conditions, seek to renegotiate with the Office the applicability of this Order.
Binding Nature. The Office, New Century and Home123, and all officers, owners, directors, employees, heirs and assigns of new Century and Hom123 intend to be and are legally bound by the terms of this Order.
Counsel. This Order is entered into by the parties upon full opportunity for legal advice from legal counsel.
Effectiveness. New Century and Home123 hereby stipulate and agree that the Order shall become effective on the date that the Office executes this Order.
Other Enforcement Action.

a. The Office reserves all of its rights, duties, and authority to enforce all statutes, rules and regulations under its jurisdiction against New Century and Home123 in the future regarding all matters not resolved by this Order.

b. New Century and Home123 acknowledge and agree that this Order is only binding upon the Office and not any other local, state or federal agency, department or office regarding matters within this Order.

Authorization. The parties below are authorized to execute this Order and legally bind their respective parties.
Counterparts. This Order may be executed in separate counterparts and by facsimile.
Titles. The titles used to identify the paragraphs of this document are for the convenience of reference only and do not control the interpretation of this document.

WHEREFORE, in consideration of the foregoing, including the recital paragraphs, the Office, New Century and Home123 intending to be legally bound do hereby execute this Consent Agreement and Order.

STATE OF MAINE

OFFICE OF CONSUMER CREDIT REGULATION

/s/William N. Lund, Director

Office of Consumer Credit Regulation

March 20, 2007

FOR NEW CENTURY MORTGAGE CORPORATION

/s/Stergios Theologides

(Officer Signature)

Stergios Theologides

(Print Officer Name)

Exec. Vice President & General Counsel

Title

Date: March 20, 2007

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