SEC Files Fraud Charges on Former Subprime Lenders

Rocky road for lender

After several treacherous years in the mortgage industry, a shining example of how the subprime market crashed is New Century Financial Corp who as recently as 2007 had over 7,000 employees and employed Bob Villa as a spokesperson and was a substantial NASCAR sponsor. New Century was at one point one of the largest lenders to those with credit challenges but where they went wrong is when the company began allegedly fudging their numbers for investors.

The now bankrupt lender, New Century has been investigated by the SEC for some time now and the most recent filings come in the form of the SEC seeking civil penalties and disgorgement of funds from the defendants, former CEO Brad Morrice, former CFO Patti Dodge and former Controller David Kenneally.

Is this the Obama Administration seeking to set things right and imply accountability or is it too little too late?

Mortgage Planner James Barath said, “as with anything in life, it is always easier to point the finger than to take responsibility. Because of their failure to recognize the underlying issues that resulted to the financial meltdown the SEC has been under duress by Congress and the general public to right the errors of their oversight.”

Although New Century doesn’t have a pretty record (read more about them here), is this a case of politics or is the SEC doing their job and cleaning up fraud?