IRVINE, Calif., Feb. 7 /PRNewswire-FirstCall/ -- New Century Financial Corporation , a real estate investment trust (REIT), today announced that total mortgage loan production for January 2007 was $4.2 billion, reflecting a 5.0 percent increase compared with $4.0 billion in January 2006.
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"Given the current environment and our recently tightened underwriting guidelines, we are pleased with the year-over-year loan production growth in January," said Brad A. Morrice, President and Chief Executive Officer. "However, in response to the level of early-payment defaults and loan repurchases, as well as changing secondary market demand for certain products and product changes likely to be required by regulatory authorities, we have intensified our focus on tightening our underwriting guidelines and taking other steps to further improve fraud detection and risk management. While we expect the impact of these developments to be partially offset by our growth initiatives, including the roll-out of our Alt-A product through our Wholesale channel, we no longer expect our loan production to be flat in 2007 compared with the $59.8 billion originated in 2006; rather, our revised outlook for 2007 loan production is to be down approximately 20 percent compared with 2006. Importantly, it is difficult to predict the impact of the steps we continue to take in response to changing market conditions."
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About New Century Financial Corporation
Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. New Century is committed to serving the communities in which it operates with fair and responsible lending practices. To find out more about New Century, please visit http://www.ncen.com/.
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws and the company intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, but are not limited to, the company's expectation that the impact of the developments causing it to tighten its underwriting guidelines and take other steps to further improve fraud detection and risk management, will be partially offset by the company's growth initiatives, including the roll-out of its Alt-A product through its Wholesale channel, and that 2007 loan production will be down approximately 20 percent compared with 2006. The company cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements. Such factors include, but are not limited to: (i) the condition of the U.S. economy and financial system; (ii) the interest rate environment; (iii) the effect of increasing competition in the company's sector; (iv) the stability of residential property values; (v) the ability of the company to close on its forward loan-sale commitments at its projected gain-on-sale executions; (vi) the potential effect of new state or federal laws and regulations; (vii) the outcome of litigation or regulatory actions pending against the company; and (viii) the company's ability to maintain adequate credit facilities to finance its business. Additional information on these and other factors is contained in the company's Annual Report on Form 10-K for the year ended December 31, 2005 and the other periodic filings of the company with the Securities and Exchange Commission. The company assumes no, and hereby disclaims any, obligation to update the forward-looking statements contained in this press release.
Mortgage Loan Production Data
(in billions)
January 2007 January 2006
%
Wholesale Retail Total Wholesale Retail Total Change
Non-Prime $3.2 0.2 3.4 3.2 0.3 3.5 -2.9%
Prime and Alt-A 0.4 0.4 0.8 0.2 0.3 0.5 60.0%
Total $3.6 0.6 4.2 3.4 0.6 4.0 5.0%
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