Termination of Guaranty



 Exhibit 10.3 
  
 MORGAN STANLEY MORTGAGE CAPITAL INC. 
 1221 Avenue of the Americas, 27th Floor 
 New York, New York 10020 
  
 October 1, 2004 
  
 New Century Financial Corporation 
 18400 Von Karman, Suite 1000 
 Irvine, California 92612 
 Attention: Ralph Flick 
  

	 	Re:	Termination of Guaranty 

  
 Ladies and Gentlemen: 
  
 Reference is hereby made to (i) that certain Second Amended and Restated Guaranty, dated as of January 30, 2004 (as amended, restated, supplemented or
otherwise modified from time to time, the “Existing Guaranty”), made by New Century Financial Corporation, a Delaware corporation (the “Existing Guarantor”) in favor of Morgan Stanley Bank (“MSB”) and
Morgan Stanley Mortgage Capital Inc. (“MSMCI”, together with MSB, the “Beneficiaries”) and (ii) that certain Third Amended and Restated Master Loan and Security Agreement, dated as of October 1, 2004 (as amended,
restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), among NC Capital Corporation, a California corporation (“NC Capital”), New Century Mortgage Corporation, a California
corporation (“New Century”), NC Residual II Corporation, a Delaware corporation (“NC Residual”, together with NC Capital and New Century, the “Existing Borrowers”), New Century Credit Corporation, a
California corporation (“NC Credit”, together with the Existing Borrowers, collectively, the “Borrowers”, each, a “Borrower”), Morgan Stanley Bank, a Utah industrial loan corporation
(“MSB”), as a lender (a “Lender”), and Morgan Stanley Mortgage Capital Inc., a New York corporation (“MSMCI”), as a lender (a “Lender”, in such capacity, together with MSB,
collectively, the “Lenders”) and as agent for the Lenders (in such capacity, the “Agent”). 
  
 This letter will serve as confirmation that, (i) effective as of the date hereof, the Existing Guarantor has been renamed New Century TRS Holdings, Inc.,
a Delaware corporation, (ii) pursuant to that certain Guaranty, dated as of October 1, 2004 (the “Replacement Guaranty”), made by New Century Financial Corporation, a Maryland corporation (f/k/a New Century REIT, Inc., a Maryland
corporation) (the “Replacement Guarantor”) in favor of the Lenders and the Agent, the Replacement Guarantor shall be the Guarantor under the Loan Agreement and (iii) effective upon the effectiveness of the Replacement Guaranty, the
Existing Guaranty shall be deemed to be terminated and, except for those provisions which by their terms survive such termination, the Existing Guaranty shall be of no further force or effect and the Existing Guarantor shall have no further
obligations thereunder. 
  
 [SIGNATURES FOLLOW] 








			
	 Very truly yours,

	
	 MORGAN STANLEY MORTGAGE
 CAPITAL INC.

		
	 By:
	 	 /s/ Paul J. Najarian


	 Name:
	 	 Paul J. Najarian

	 Title:
	 	 Vice President



  

			
	 Acknowledged and agreed:

	
	 MORGAN STANLEY BANK

		
	 By:
	 	 /s/ Paul J. Najarian


	 Name:
	 	 Paul J. Najarian

	 Title:
	 	 Vice President









 Acknowledged and agreed: 
  
 NEW CENTURY TRS HOLDINGS, INC., a Delaware corporation

 (f/k/a New Century Financial Corporation, a Delaware corporation) 
  

			
	 By:
	 	 /s/ Kevin Cloyd


	 Name:
	 	 Kevin Cloyd

	 Title:
	 	 Executive Vice President


  
 NEW
CENTURY FINANCIAL CORPORATION, a Maryland corporation 
 (f/k/a New Century REIT, Inc., a Maryland corporation) 

 

			
	 By:
	 	 /s/ Kevin Cloyd


	 Name:
	 	 Kevin Cloyd

	 Title:
	 	 Executive Vice President