Separately, New Century said that on June 29 it closed the sale of its mortgage servicing unit,which handles collections, to Greenwich, Connecticut-based hedge fund Carrington CapitalManagement LLC. It said the final net sale price was $177.4 million, below the $184 million itoriginally expected.
From Business Times Pittsburgh July 31, 2009
Ohio’s top lawyer and the state Department of Commerce have sued a California subprimemortgage servicer, alleging the company fell short of a pact with the state to offer loanmodifications to borrowers.Attorney General Richard Cordray’s office said Friday that the suit against Santa Ana, Calif.-basedCarrington Mortgage Services LLCalso alleges violations of the state Consumer Sales PracticesAct. Cordray in a release called the company’s customer service “incompetent, inadequate andinefficient.”Carrington in January 2008 signed a pact with the state to resolve a dispute tied to previouslitigation against bankrupt mortgage lender
Carrington and anaffiliate in 2007 bought New Century’s loan serving platform in bankruptcy court. Later in 2008,Carrington was among nine mortgage servicers that signed a non-binding agreement with the statefor “substantial and large-scale” modifications to help Ohioans facing foreclosure stay in their homes. Cordray said the lawsuit filed in Franklin County Common Pleas Court alleges Carringtondidn’t give borrowers workout terms that sidestep foreclosure and didn’t respond to complaints ina timely manner.“This lawsuit makes it clear that we have reached zero tolerance for this kind of behavior fromloan servicers,” Cordray said in a release. “We’ve tried to work with them, but now we must takeaction. I am determined to see that mortgage servicers step up, take responsibility and start makingit right with Ohioans. No more excuses.”Carrington released a statement in response to the lawsuit in which it said it was “proud of our track record in the state of Ohio and throughout the United States.”“Carrington remains single-mindedly committed to helping homeowners throughout this difficulteconomic cycle and has modified loans for approximately half of its customers, the vast majorityof which are now back on track and remain in their homes,” the statement said. “We regret that the