Amidst Allegations Of Cheating Buyers, Ameriquest Agrees To $325M Settlement
Ameriquest Mortgage Company, the nation’s largest mortgage lender serving people with credit problems, has agreed to a $325 million settlement admist allegations that the company misled customers.
The Fort Lauderdale Sun-Sentinel reports that Ameriquest and its parent company, ACC Capital Holdings Corp., will refund $295 million to customers and pay $30 million in fees to 49 states and the District of Columbia for investigating the claims. Florida’s share of the settlement will be $19 million, — the second largest of all the states participating in the settlement, according to a spokeswoman for the Florida Attorney General’s Office.
The settlement is the second largest of its kind against a mortgage lender, trailing only a whopping $484 million settlement against Household International, Inc., in 2002.
Florida has about 62,000 Ameriquest customers that could be affected. State officials will contact Ameriquest customers that qualify for a refund, which applies to loans issued between January 1, 1999 and December 31, 2005. Regulators say that in 1999, the company’s sales force urged appraisers to pump up real estate appraisals, misrepresented fees and lured customers with the promise of lower mortgage rates, only to charge higher rates in the end.
“This landmark agreement sets high standards that we expect other mortgage lenders to follow,” Florida Attorney General Charlie Crist said in a written statement.
While Ameriquest admitted no wrongdoing in the settlement, the company will be required to provide customers more information regarding terms of its loans. It will also not be allowed to inflate appraisals, or conduct any refinancing that doesn’t directly benefit the borrower. The settlement also applies to other subsidiaries, such as AMC Mortgage Services, Inc., formerly known as Bedford Home Loans, and Town & Country Credit Corp.
“Doing the right thing for the people we serve has always been one of our core values. We regret those occasions when our associates have not met this ideal to our customers’ expectations,” said Aseem Mital, CEO of ACC Capital Holdings, in a statement.
Florida’s fiscal regulators have made a concerted effort to take appropriate action if there is wrongdoing, said Commissioner Don Saxon of the Florida Office of Financial Regulation. The office took part in the investigation with the state Attorney General’s Office. Similar cases could evolve at the state level, as regulators grow frustrated that their citizens are not getting adequate federal protection, according to the National Consumer Law Center in Boston.
No question about it, the job of federal and state regulators is getting more difficult, with the rise of exotic Florida home loans in popularity. As a buyer, be sure you know exactly what you are signing up for.
