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acquired by the GSEs. The benchmark goal levels for the low-income and very low-income home purchase goals did not change from the proposed housing goals rule, however, the final rule adjusts the low-income refinance goal downward reflecting recent market conditions. FHFA does not intend for the GSEs to undertake economically adverse or high-risk activities in support of the goals, nor does it intend for the enterprises’ state of conservatorship to be a justification for withdrawing support from these important market segments. As noted in the final rule, FHFA expects to take future regulatory action to address the housing goals treatment of purchases of multifamily loans that aid the conversion of properties that have affordable rents to properties that have less affordable, market rate rents. FHFA also may solicit further comments on how the housing goals can further promote susustainable homeownership and how multifamily subordinate liens can be structured to benefit low-income residents. The final rule is effective 30 days after publication in the Federal Register. For more information, visit www.fhfa.gov.

Former New Century execs barred for five years by SEC for misleading disclosures The Securities & Exchange Commission (SEC) has accepted settlement offers from three former officers of New Century Financial Corporation: Brad A. Morrice, the former New Century chief executive officer and co-founder; Patti M. Dodge, the former chief financial officer; and David N. Kenneally, former New Century controller. The SEC’s complaint alleges, among other things, that New Century’s second and third quarter 2006 Forms 10-Q and two late 2006 private stock offerings contained false and misleading statements regarding its sub-prime mortgage business. Each of the defendants agreed to be barred for five years from serving as an officer and director of a public company. The complaint further alleges that Morrice and Dodge knew about certain negative trends in New Century’s loan portfolio from reports they received and that they participated in the disclosure process, but they did not take adequate steps to ensure that the negative trends were properly disclosed. The Commission’s complaint also alleges that in the second and third

quarters of 2006, Kenneally, contrary to Generally Accepted Accounting Principles, implemented changes to New Century’s method for estimating its loan repurchase obligation and failed to ensure that New Century’s backlog of pending loan repurchase requests were properly accounted for, resulting in an understatement of New Century’s repurchase reserve and a material overstatement of New Century’s financial results. The complaint further alleges that Dodge was told of the methodology changes and the backlog of repurchase requests but did not ensure that they were properly accounted for and disclosed. To settle the charges, Morrice consented to the entry of a permanent injunction prohibiting him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and the internal controls, false statements to accountants, and certification provisions of Section 13(b)(5) of the Exchange Act and Rules 13b2-2 and 13a-14 thereunder; and from aiding and abetting violations of the reporting provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder. He also agreed to disgorge $464,354 with $76,991 in prejudgment interest thereon, and to pay a $250,000 civil penalty. To settle the charges, Dodge con-

sented to the entry of a permanent injunction prohibiting her from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and the books and records, internal controls, false statements to accountants, and certification provisions of Section 13(b)(5) of the Exchange Act and Rules 13b2-1, 13b2-2, and 13a-14 thereunder; and from aiding and abetting violations of the reporting provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder. She also agreed to disgorge $379,808 with $70,192 in prejudgment interest thereon, and to pay a $100,000 civil penalty. Kenneally has consented to the entry of a permanent injunction prohibiting him from violating the antifraud provisions of Sections 10(b) of the Exchange Act and Rule 10b-5 thereunder, and the books and records, internal controls, and false statements to accountants provisions of Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder; and from aiding and abetting violations of the reporting provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder. He also agreed to disgorge $126,676 with $23,324 in prejudgment interest thereon, and to pay a $32,500 civil penalty. For more information, visit www.sec.gov.

SEPTEMBER 2010 

MISSOURI MORTGAGE PROFESSIONAL MAGAZINE

 NationalMortgageProfessional.com

10

Mortgage Brokers and Loan Originators

SAVE THE DATE! Attend the 2010 NAMB/WEST Conference December 4-6, 2010 at the MGM Grand Las Vegas.

Visit www.NAMBWEST.com for updates.

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