New Century Clarifies Two Legal Matters

Apr 05, 2001, 01:00 ET from New Century Financial Corporation

    IRVINE, Calif., April 5 /PRNewswire/ -- New Century Financial Corporation
 (Nasdaq:    NCEN) clarified today the status of two legal matters discussed in
 the Company's recently filed Form 10-K.  Management believes that both matters
 will be resolved without any material adverse impact on the Company's
 operations, financial condition and business prospects.
     In August 2000, the Company received an inquiry from the Federal Trade
 Commission.  The Company believes, based on the FTC's document requests, that
 the inquiry relates to the pre-approved credit solicitations that the Company
 mails to potential customers.  The Company has been cooperating fully with the
 FTC, and believes that its practices have complied with applicable law and
 prudent industry practices.
     In October 2000, the Company was added as a defendant in an Ohio class
 action lawsuit that had been previously filed against various home improvement
 contractors and mortgage brokers.  The factual claims involve an alleged home
 improvement scam.  The claims against New Century assert that it violated a
 variety of lending laws.  The Company believes these claims do not have merit.
 The Company has filed a motion to dismiss those claims, and the plaintiffs
 have moved for permission to amend their complaint once again.  The Company
 intends to renew its motion to dismiss and continue to vigorously defend
 itself in this action.
     The Company maintains its long-standing history of prudent lending
 practices, takes pride that it has never been a party to material legal or
 regulatory issues, and maintains a good corporate citizenship.  In addition,
 the Company takes efforts to prevent itself as well as its customers from
 being victimized by home improvement scams and other fraud.
     The Company will keep the investment community apprised of any material
 changes in either matter.
     New Century Financial Corporation is a specialty finance company that,
 through its subsidiaries, originates, purchases, sells, and services mortgage
 loans secured primarily by first mortgages on single family residences.
 
     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 (i) the belief that
 both legal matters will be resolved without any material adverse impact on the
 Company's results of operations, financial condition and business prospects,
 (ii) the belief that the FTC's inquiry primarily relates to the pre-approved
 credit solicitations that the Company mails to potential customers, (iii) the
 belief that the Company's pre-approved credit solicitation practices have
 complied with applicable law, (iv) the belief that the claims against the
 Company in the Ohio case are without merit, and (v) the intention by the
 Company to vigorously defend itself in the class action lawsuit.  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
 Company's ability to resolve both legal matters, (ii) the possibility that the
 FTC will expand the scope of its inquiry, (iii) the possibility that the
 Company will not be successful in dismissing the claims against it in the Ohio
 lawsuit or defeating any class certification motion or significantly narrowing
 the size of the class, and (iv) the possibility that the plaintiffs will
 materially alter the factual allegations or legal theories asserted in the
 Ohio case.  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, 2000
 and its other periodic filings with the Securities and Exchange Commission.
 
 

SOURCE New Century Financial Corporation
    IRVINE, Calif., April 5 /PRNewswire/ -- New Century Financial Corporation
 (Nasdaq:    NCEN) clarified today the status of two legal matters discussed in
 the Company's recently filed Form 10-K.  Management believes that both matters
 will be resolved without any material adverse impact on the Company's
 operations, financial condition and business prospects.
     In August 2000, the Company received an inquiry from the Federal Trade
 Commission.  The Company believes, based on the FTC's document requests, that
 the inquiry relates to the pre-approved credit solicitations that the Company
 mails to potential customers.  The Company has been cooperating fully with the
 FTC, and believes that its practices have complied with applicable law and
 prudent industry practices.
     In October 2000, the Company was added as a defendant in an Ohio class
 action lawsuit that had been previously filed against various home improvement
 contractors and mortgage brokers.  The factual claims involve an alleged home
 improvement scam.  The claims against New Century assert that it violated a
 variety of lending laws.  The Company believes these claims do not have merit.
 The Company has filed a motion to dismiss those claims, and the plaintiffs
 have moved for permission to amend their complaint once again.  The Company
 intends to renew its motion to dismiss and continue to vigorously defend
 itself in this action.
     The Company maintains its long-standing history of prudent lending
 practices, takes pride that it has never been a party to material legal or
 regulatory issues, and maintains a good corporate citizenship.  In addition,
 the Company takes efforts to prevent itself as well as its customers from
 being victimized by home improvement scams and other fraud.
     The Company will keep the investment community apprised of any material
 changes in either matter.
     New Century Financial Corporation is a specialty finance company that,
 through its subsidiaries, originates, purchases, sells, and services mortgage
 loans secured primarily by first mortgages on single family residences.
 
     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 (i) the belief that
 both legal matters will be resolved without any material adverse impact on the
 Company's results of operations, financial condition and business prospects,
 (ii) the belief that the FTC's inquiry primarily relates to the pre-approved
 credit solicitations that the Company mails to potential customers, (iii) the
 belief that the Company's pre-approved credit solicitation practices have
 complied with applicable law, (iv) the belief that the claims against the
 Company in the Ohio case are without merit, and (v) the intention by the
 Company to vigorously defend itself in the class action lawsuit.  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
 Company's ability to resolve both legal matters, (ii) the possibility that the
 FTC will expand the scope of its inquiry, (iii) the possibility that the
 Company will not be successful in dismissing the claims against it in the Ohio
 lawsuit or defeating any class certification motion or significantly narrowing
 the size of the class, and (iv) the possibility that the plaintiffs will
 materially alter the factual allegations or legal theories asserted in the
 Ohio case.  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, 2000
 and its other periodic filings with the Securities and Exchange Commission.
 
 SOURCE  New Century Financial Corporation