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New Century purchased by Carrington Mortgage?


elyse449
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  • 3 months later...

Carrington Mortgage Services purchased the rights to service all mortgage loans that were part of New Century. FYI, servicing income for a mortgage servicer is in the ballpark of 0.5% of payments. Also, a mortgage servicer can generate more fee income through late payments, and other fees associated with mortgage delinquency, up to and including foreclosure costs.

Actually, the more I searched on Carrington, I found that another subsidiary called Carrington Capital Management actually purchased pools of loans from New century. All told CCM purchased approximately 62,000 loans, and $15 billion dollars of loans, that were originated by New Century. New Century became the servicer until their bankruptcy. Carrington Mortgage Services then purchased the servicing rights to all of New Century's servicing portfolio. I guess one could say that Carrington Mortgage Services is protecting Carrington Capital Managements investment in the high yield subprime mortgage sector.

Looking at the loan pool information, nearly half of the loans purchsed by CCM were stated income loans, and the average FICO was barely over 600. California loans also seemed to be a favorite of CCM, since over 20% of the loans that were purchased in these pools were originated in California. Most of the time CCM would appear to purchase the first mortgage up to 80% of the loan amount.

I am going to post a link showing the mortgage pools that CCM actually owns, and the aggregate of these portfolios: https://www.carringtoncap.com/secure/files/CompPerf_10252007.pdf

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