New Century Financial Corp., the beleaguered home lender to people with weak credit, said Monday it has received cease-and-desist orders from more states, restraining the company from taking new applications for mortgage loans.
The Irvine, Calif., company said in a filing with the Securities and Exchange Commission that Connecticut, Maryland, Rhode Island and Tennessee issued the orders Wednesday and Thursday, alleging that New Century units had violated state laws, including failure to fund mortgage loans after closing.
The company had earlier disclosed that Massachusetts, New Hampshire, New Jersey and New York issued similar orders Tuesday.
New Century said that on Wednesday the company's Home123 Corp. unit entered into a consent agreement with the Pennsylvania Banking Department's supervision and enforcement bureau. The agreement restrains the company from taking new mortgage-loan applications.
New Century, the second-largest U.S. subprime home mortgage lender last year based on loan volume, has already stopped making new loans due to a lack of funds.
The lender, now teetering on the brink of bankruptcy, is the subject of a criminal inquiry into its accounting and trading in its stock. In addition, the SEC is conducting a preliminary probe of the events leading up to its announcement last month to restate its financial results for the first three quarters of last year. The company has said it is cooperating in the investigations.