10-K 1 sb021_10k.txt SB 02-1 10K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Mark One) [ x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended DECEMBER 31, 2002 or [ ] Transition Report Pursuant to Section 13 or 15d of the Securities Exchange Act of 1934 For the transition period from _____________ to ________ Commission file Number 333-72880 New Century Mortgage Securities, Inc. (Exact name of registrant as specified in its charter) Delaware 33-0852169 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 18400 Von Karman, Suite 1000 Irvine, CA 92612 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 949-863-7243 New Century Home Equity Loan Trust Asset Backed Pass-Through Certificates Series 2002-1 (Title of each class of securities covered by this Form) Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X - Yes No PART I Item 1. Business Not applicable. Item 2. Properties Not applicable on reliance of Relief Letters Item 3. Legal Proceedings There were no legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of the Security Holders. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder matters There is no established public trading market for the notes. Below are the number of Noteholders or Certificateholders of record as of the end of the reporting year. New Century Home Equity Loan Trust Asset Backed Pass-Through Certificates Series 2002-1 Class A 6 Series 2002-1 Class M-1 3 Series 2002-1 Class M-2 3 Series 2002-1 Class M-3 2 Series 2002-1 Class M-4 1 Series 2002-1 Class CE 1 Series 2002-1 Class P 1 Item 6. Selected Financial Data. Not applicable. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Not applicable. Item 8. Financial Statements and Supplementary Data. Not applicable. Item 9. Changes in and Disagreements with Accountants on Accounting and Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant Not applicable. Item 11. Executive Compensation Not applicable. Item 12. Security Ownership of Certain Beneficial Owners and Management Not applicable. Item 13. Certain Relationships and Related Transactions. Not applicable. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) 1. Not Applicable 2. Not Applicable 3. Exhibits 99.1 Annual Summary Statement 99.2 Annual Statement as to Compliance. 99.3 Annual Independent Public Accountant's Servicing Report. 99.4 Management Assertion on USAP (b) Reports on Form 8-K The registrant has filed Current Reports on Form 8-K with the Securities and Exchange Commission dated: March 25, 2002; April 25,2002; May 28, 2002; June 25, 2002; July 25, 2002; August 26, 2002; September 25, 2002; October 25, 2002; 'November 25, 2002; December 26, 2002 (c) See (a) 3 above (d) Not Applicable SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. New Century Home Equity Loan Trust Asset Backed Pass-Through Certificates Series 2002-1 /s/ Kevin Cloyd Name: Kevin Cloyd Title: Executive Vice President Date: March 31, 2003 Sarbanes-Oxley Certification I, Kevin Cloyd, certify that: 1. I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by this annual report, of New Century Home Equity Loan Trust Asset Backed Pass-Through Certificates Series 2002-1 2. Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report; 3. Based on my knowledge, the distribution or servicing information required to be provided to the trustee by the servicer under the pooling and servicing, or similar, agreement, for inclusion in these reports is included in these reports; 4. Based on my knowledge and upon the annual compliance statement included in the report and required to be delivered to the trustee in accordance with the terms of the pooling and servicing, or similar, agreement, and except as disclosed in the reports, the servicer has fulfilled its obligations under the servicing agreement; and 5. The reports disclose all significant deficiencies relating to the servicer's compliance with the minimum servicing standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedure, as set forth in the pooling and servicing, or similar, agreement, that is included in these reports. In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: U.S. Bank National Association, as Trust Administrator Ocwen Federal Bank FSB, as Master Servicer Date: March 27, 2003 /s/ Kevin Cloyd Kevin Cloyd Compancy: New Century Mortgage Securities, Inc. Title: Executive Vice President EXHIBIT INDEX Exhibit NumberDescription 99.1 Annual Summary Statement 99.2 Annual Statement of Compliance 99.3 Report of Independent Accountants 99.4 Management Assertion on USAP EXHIBIT 99.1 -- Summary of Aggregate Amounts or End of Year Amounts for the period ending December 31, 2002 New Century Home Equity Loan Trust Asset Backed Pass-Through Certificates Series 2002-1 STATEMENT TO CERTIFICATEHOLDERS Class Beg Bal Prin Losses End Bal A 160,901,000 26,399,542 0 134,501,458 M-1 12,415,000 0 0 12,415,000 M-2 11,423,000 0 0 11,423,000 M-3 9,435,000 0 0 9,435,000 M-4 497,000 0 0 497,000 CE 3,972,996 0 0 3,972,996 P 100 0 0 100 R 0 0 0 0 Total 198,644,096 26,399,542 0 172,244,554 Next Class Cusip Int Total Rate Rate A 64352VCC3 2,728,936 29,128,478 1.70000% 1.74000% M-1 64352VCD1 271,069 271,069 2.18000% 2.22000% M-2 64352VCE9 307,096 307,096 2.78000% 2.82000% M-3 64352VCF6 301,297 301,297 3.38000% 3.42000% M-4 64352VCG4 17,335 17,335 3.73000% 3.77000% CE 6435299A0 9,183,175 9,183,175 6.17112% P 6435299B8 667,340 667,340 NA R N/A 0 0 Total 13,476,247 39,875,789 AMOUNTS PER $1,000 UNIT Class Prin Int Total Losses End Bal A 164.073198 16.960345 181.033543 0.000000 835.926802 M-1 0.000000 21.833963 21.833963 0.000000 1000.000000 M-2 0.000000 26.883963 26.883963 0.000000 1000.000000 M-3 0.000000 31.933963 31.933963 0.000000 1000.000000 M-4 0.000000 34.879799 34.879799 0.000000 1000.000000 CE 0.000000 2311.398027 2311.398027 0.000000 1000.000000 P 0.000000 6673396.70 6673396.70 0.000000 1000.000000 MASTER SERVICER COMPENSATION 794,704.30 P&I ADVANCES Total Advances (as of December Det Date) 13,521 *P&I Advances are on Loans Delinquent on the Determiniation Date. BALANCES AS OF: 12/26/02 Stated Prin Bal of Mtge Loans (excluding REOs) 170,857,686 Stated Prin Bal of REO Properties 1,386,868 Mortage Loan Characteristics Beginning Ending Number of Loans 588 509 Agg Prin Balance 198,644,096 172,244,554 Wghtd Avg Rem Term to Maturity 349 Beg Wghtd Avge Mortgage Rate 8.62477% DELINQ INFORMATION Unpaid Prin Stated Prin Number Bal Bal 30-59 days 14 3,838,317 3,832,054 60-89 2 71,328 71,247 90+ 4 970,428 967,508 Fcls 13 3,849,651 3,837,340 Bankruptcies 6 1,001,900 998,124 Bkcy 60+ Delq 6 1,001,900 998,124 *Note: In accordance with the Master Servicer, the Delq Info relates to the Prepayment Period. REO INFORMATION (as of December report) Loans that became REO properties in the preceding calendar month: Loan UPB Stated Bal 532002 421,999 421,999 542639 433,138 433,138 Total Book Value of REO Properties: 550,782 Aggregate Amount of Principal Prepayments Curtailments 141,246 Payments in Full 24,751,934 Liquidation Proceeds 176,340 Total 25,069,520 Prepayment Charges 667,340 REO Principal Amortization 1,902 Realized Losses that were incurred during the related Prepayment Period Total Realized Losses 126,976 Which Include: Bankruptcy Losses 0 Cumulative Realized Losses 126,976 Extraordinary Trust Fund Expenses withdrawn from the Collection Account or Distribution Account that caused a reduction of the Available Distribution Amount: 0 CERTIFICATE FACTOR Certificate Factor Class A 0.83592680 Class M-1 1.00000000 Class M-2 1.00000000 Class M-3 1.00000000 Class M-4 1.00000000 Class CE 0.86710130 INTEREST DISTRIBUTION AMOUNTS Interest Interest Distribution Carry Forward Class Amount Amount A 2,728,936 0 M-1 271,069 0 M-2 307,096 0 M-3 301,297 0 M-4 17,335 0 CE 9,183,175 NA TOTAL 12,808,907 0 Reduction from the Allocation of: Prepayment Relief Act Realized Interest Interest Class Losses Shortfalls Shortfalls A 0 0 0 M-1 0 0 0 M-2 0 0 0 M-3 0 0 0 M-4 0 0 0 CE 126,976 0 0 TOTAL 0 0 0 PPIS not covered by the Servicer 0 Relief Act Interest Shortfall 0 Required Overcollateralized Amount 3,972,996 Credit Enhancement Percentage 21.91245% Overcollateralization Increase Amount 0 Overcollateralization Reduction Amount 0 LOSS SEVERITY % (December) Loan Loss % Loan Loss % AGGREGATE LOSS SEVERITY % 41.932% PERFORMANCE MEASURES Net Monthly Excess Cash Flow 9,311,114 Delinquency Percentage 4.21557% Stepdown Date Occurrence NO Trigger Event Occurrence NO Net WAC Rate Carryover Amount Current Amount Net WAC Rate Unpaid Carryforward After Class Amount Distributions A 0 0 M-1 0 0 M-2 0 0 M-3 0 0 M-4 0 0 TOTAL 0 0 EXHIBIT 99.2 -- Servicer's Annual Statement of Compliance OFFICER'S CERTIFICATION ON ANNUAL STATEMENT AS TO COMPLIANCE March 13, 2003 NCMS 2002-1 Pursuant to the applicable sections of the Servicing Agreements, I, Scott W. Anderson as officer of Ocwen Federal Bank FSB (the "Bank") confirm that a review of the activities of the Bank during the calendar year ending December 31, 2002 and of the performance under the Servicing Agreements has been made under my supervision. To the best of my knowledge, based on such review, the Bank has fulfilled all of its obligations under the Servicing Agreements throughout such calendar year. /s/ Scott W. Anderson Scott W. Anderson Senior Vice President, Residential Assets Ocwen Federal Bank FSB 1675 Palm Beach Lakes Boulevard West Palm Beach, FL 33401 Mail to: P.O. Box 24737 West Palm Beach, FL 33416-4737 EXHIBIT 99.3 -- Report of Independent Auditors Pricewaterhouse Coopers LLP 222 Lakeview Avenue Suite 360 West Palm Beach, FL 33401 Telephone (561) 832 0038 Facsimile (561) 805 8181 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT To the Board of Directors of Ocwen Federal Bank FSB We have examined management's assertion, included in the accompanying Management Assertion on Compliance with USAP, that, except for the noncompliance related to interest on escrows described in the third paragraph, Ocwen Federal Bank FSB (the "Bank") complied with the minimum servicing standards identified in the Mortgage Bankers Association of America's ("MBA's") Uniform Single Attestation Program for Mortgage Bankers ("USAP") as of and for the year ended December 31, 2002. Management is responsible for the Bank's compliance with those minimum servicing standards. Our responsibility is to express an opinion on management's assertion about the Bank's compliance based on our examination. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Bank's compliance with the minimum servicing standards and performing such other procedures as we consider necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Bank's compliance with the minimum servicing standards. Our examination disclosed noncompliance with minimum servicing standards in certain states related to interest on escrows applicable to the Bank during the year ended December 31, 2002. Such noncompliance is described in the accompanying Management Assertion on Compliance with USAP. In our opinion, management's assertion that the Bank complied with the aforementioned minimum servicing standards, except for noncompliance as described in the accompanying Management Assertion on Compliance with USAP, as of and for the year ended December 31, 2002 is fairly stated, in all material respects. /s/PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP March 14, 2003 EXHIBIT 99.4 -- Management Assertion on USAP MANAGEMENT ASSERTION ON COMPLIANCE WITH USAP March 14, 2003 As of and for the year ended December 31, 2002, except as specifically noted below, Ocwen Federal Bank FSB (the "Bank") has complied in all material respects with the minimum servicing standards set forth in the Mortgage Bankers Association of America's ("MBA's") Uniform Single Attestation Program for Mortgage Bankers ("USAP"). Standard: Interest on escrow accounts shall be paid, or credited, to mortgagors in accordance with the applicable state laws. Interest on escrow accounts in certain states was not paid, or credited, to mortgagors in accordance with the applicable state laws during the year ended December 31, 2002. The Bank is currently implementing an enhancement to its REALServicingTM servicing system to ensure that, for loans collateralized by properties located in states that require the payment of interest on escrow accounts, the payment or crediting of such interest is in accordance with applicable state laws. As of and for this same period, the Bank had in effect a fidelity bond in the amount of $15,000,000 and an errors and omissions policy in the amount of $10,000,000. /s/ Ronald M. Faris Ronald M. Faris President /s/ Scott W. Anderson Scott W. Anderson Senior Vice President of Residential Assets /s/ James D. Campbell James D. Campbell Director of Investor Reporting Ocwen Federal Bank FSB 1675 Palm Beach Lakes Boulevard West Palm Beach, FL 33401 Mail to: P.O. Box 24737 West Palm Beach, FL 33416-4737