Complaint Review: Ameriquest - Anaheim California

Inner City Press Report - January 30, 2006 Argent Mortgage Layoffs, One Week After Ameriquest's $235 Predatory Lending Settlement One week after announcing a $325 million predatory lending settlement by three of its subsidiaries, ACC Capital Holdings on January 30 has reportedly laid off 16% of the workforce of its non-covered subsidiary, Argent Mortgage. So, analysts wonder, will Ameriquest's settlement be paid by eliminating what few levels of oversight exist in Argent Mortgage's subprime lending process? The layoff reports have reached Inner City Press from impacted employees, one of whom writes: Subject: Argent Layoffs Sent: Mon, 30 Jan 2006 16:39:48 -0800 (EST) From: [Name withheld] To: Ameriquest-Watch [at] innercitypress.org Argent has laid off 16% of their workforce (approximately 1250-1500) in job cuts that took place this past Friday and Today. The positions include mostly production jobs, but cuts were also made within their corporate staff. No sales positions were eliminated. One of the biggest changes to come from this consolidation has been the elimination of set-up and doc draw employees. Underwriters will perform the set-up function, and funders will assume the duties of the doc-drawers. Customer service levels and turn time may be affected by these changes. Layoffs by Location: 200 Doc-drawers and set-up workers in White Plains, NY ~100 Doc-drawers and set-up workers in Schaumburg, IL Also Subject: Argent Update 1/30/06 Sent: Tue, 31 Jan 2006 00:26:48 +0000 From: [Name withheld] To: Ameriquest-Watch [at] iinnercitypress.org I thought you would be interested to know that Argent Mortgage laid off approximately 16% of its workforce today. Luckily, I still have a job, but I would like to see what you write about it. I find your site very informative. Beyond the kind words, one of the questions raises by the specific job-functions that have reportedly been targeted for the layoffs is whether, just after three subsidiaries have settled predatory lending charges, the non-covered subsidiary should be eliminating what oversight it has of its lending process. What will the attorneys general (or the U.S. Senators considering the nomination of ACC founder Roland Arnall to become U.S. ambassador to the Netherlands) or most importantly the consumers impacted by ACC and Argent have to say about these strangely-timed layoffs? Only time will tell In other media, North Carolina's attorney general's spokeswoman has tried to explain the loopholes in the settlement by telling the Charlotte Observer that the settlement was necessarily "limited to activities over which Ameriquest had direct control." We note that by laying-off 1200 employees at Argent, ACC can claim to have even less control over Argent's high-cost subprime mortgages. The St. Louis Post-Dispatch has reported on a sample instance of a borrower whom ACC instructed to file another application - and this time include a letter stating that she owns a cleaning company. They told me what to write,' she recalls. She says Ameriquest loan officers instructed her to write that she had received an advance of $12,000 to clean two office buildings. It wasn't true, but Hopkins says she and her husband needed the $125,000 loan... They eventually lost the house. In other St. Louis news, Fair Finance Watch has filed comment on the proposed acquisition there of Forbes First National Corporation's Pioneer Bank & Trust Company by notorious subprime lender National City Corporation click here to view, and click here for FFW Jan. 30 comments on Whitney National Bank's attempt to buy 1st National Bank & Trust in Florida. ------------------ Ameriquest You SUCK!!! the Rangers and the Rolling Stones are helping ameriquest hurt us....Why? $$$

I had to laugh........... I was amused to read the last rebuttle from "Ameri". He/she/whatever seems to have some kinda inside knowledge of Ameriquest's many millions they have received from ripping off everyone they could. Of course they have lots of money and can pay for their 59 cent paperclips and notepads. They can pay for their little training classes to teach their reps how to cheat and defraud. They probably pay dumb shits to post rebuttals on this website to defend their theiving ways. They must have had to hire a huge crew to do that. Joe commented that individuals will only receive $600. Well, if that's the case, it's $600 coming from Ameriquest's pockets and it's $600 more for the customers they have screwed. I don't care how much money they have, it will still put a little dent in their stolen funds account. And I agree with him that the lawsuits and loss of business will hurt them. I have told everyone and anyone I meet or know to NOT finance with Ameriquest. Word of mouth can make or break a company. I don't care how big they are. They may not go out of business due to running out of money now but, in the future, with no new customers to rip off, it will run out eventually. It may take years but we will all see them burn. They deserve and they have earned all the bad publicity. There are way too many individuals out here they have deceived and it's time everyone learned of their fraudulent activities. They "rape" their customers and bleed them dry. But, thank goodness, people are finally starting to fight back. We, the abused customers, may be only small pawns individually to fraudulent Ameriquest, but the class action lawsuits have bonded many of us together and this rotten company is feeling a little payback of the abuse they have dealt out to hard working individuals for years. I cannot say I'm sorry to the employees that will be laid off soon. They are just as rotten as the company they represent. Ameriquest reps can have no conscience or respect for others to con people into signing bogus contracts and promises of lower interest rates in the future. And this "Learn About It" individual who claims there are hard working, committed people within the organization that support and provide for others really amazes me. Hard working, maybe. Committed? Committed to what? Lying to people in order to line their and Ameriquests pockets with the hard earned dollars of customers they have deceived? Give me a break. And who do they support and provide for? It has to be for each other and the thieves who run this organization because it sure isn't for the customers they have misled and swindled. Customers, who if Ameriquest didn't have, would not be in business now would it? That's why I believe this rich company will not be able to operate in the future because people are learning of how they take advantage and rip off their customers. They must continually reel in unsuspecting individuals to cheat to profit each year. With fewer victims to rip off, they will be forced out of business. The Attorney General to the BBB is aware of what Ameriquest has been up to thanks to customers who are tired of being taken advantage of and deceived. This profitable company is being investigated and it's about time. Then we have "Ameri", who obviously is an Ameriquest rep, describing the company's profits of last year. Profits they made by defrauding their customers. Is this something to be proud of? If I was a rep, which I certainly wouldn't be, I would crawl into a hole somewhere and say nothing. I would be embarrassed to even be associated with a company who makes it's money by ruining people's lives. But, as I stated before, these people who represent this roach infested company, have no conscience whatsoever. They care about nothing but themselves. I do have to feel sorry for them but I'm more sorry for all the customers they have screwed.

OK, so a company that is profitable by $600,000,000.00 is going to disolve??? Thats right, the made a SIX HUNDRED MILLION DOLLAR PROFIT last year and it was a bad year. They have ZERO debt. The leases paid upfront, everything down to the paperclips and notepads are paid. So let me ask you, they are going out of business why?? Because they are running out of money????? They could go public and probably be trading in 90 days if they needed money. Have some substance to what you are saying. Sure they laid off some Argent guys today but that was long time coming.......

OK, so a company that is profitable by $600,000,000.00 is going to disolve??? Thats right, the made a SIX HUNDRED MILLION DOLLAR PROFIT last year and it was a bad year. They have ZERO debt. The leases paid upfront, everything down to the paperclips and notepads are paid. So let me ask you, they are going out of business why?? Because they are running out of money????? They could go public and probably be trading in 90 days if they needed money. Have some substance to what you are saying. Sure they laid off some Argent guys today but that was long time coming.......

OK, so a company that is profitable by $600,000,000.00 is going to disolve??? Thats right, the made a SIX HUNDRED MILLION DOLLAR PROFIT last year and it was a bad year. They have ZERO debt. The leases paid upfront, everything down to the paperclips and notepads are paid. So let me ask you, they are going out of business why?? Because they are running out of money????? They could go public and probably be trading in 90 days if they needed money. Have some substance to what you are saying. Sure they laid off some Argent guys today but that was long time coming.......

OK, so a company that is profitable by $600,000,000.00 is going to disolve??? Thats right, the made a SIX HUNDRED MILLION DOLLAR PROFIT last year and it was a bad year. They have ZERO debt. The leases paid upfront, everything down to the paperclips and notepads are paid. So let me ask you, they are going out of business why?? Because they are running out of money????? They could go public and probably be trading in 90 days if they needed money. Have some substance to what you are saying. Sure they laid off some Argent guys today but that was long time coming.......

Unfortunetly, When you devide the $325 million that Ameriquest has to pay by the number of people in the lawsuit it comes out to about $600 per person. Enough to cover the appraisal and notary fee. The bad reputation that Ameriquest gets from this lawsuit and the loss of business will hit Ameriquest harder. $325 million is just a drop in the bucket for Rollie. Rollie the president is worth billions. So $325 million is the equivalent of a regular person getting a traffic ticket.

I completely do not understand the 1999 cut off. What about the rest of us who have been cheated by this company? My loan started in September of 1998, and I have had just as many problems with this company as the next person, yet only people from 1999 to 2003 are included. I feel that everyone involved with this company should be included, not just a select catagory. I have been fighting with this company for almost eight years over bogus fees and late charges till I am blue in the face. I have been fighting with this company about holding checks and cashing them when they feel like it, so they can collect late fees.( and yes, I have all the cancelled checks to prove it. All dated one month, and never cashed till any where from 27-30 days later.) Their response to me was we can't control the mail. Once or twice I can understand, but for almost eight years? This cut off date is not fair to all the people invloved with this company. I speak for everyone, not just myself, on this matter. It should not just include a select few. It should include "EVERYONE".

January 21, 2006 latimes.com THE NATION Ameriquest Settles Claims Accused of misleading borrowers with credit problems, the mortgage company will overhaul its lending practices and pay $325 million. By E. Scott Reckard, Times Staff Writer In a deal that could change how millions of credit-strapped Americans get their home loans, Ameriquest Mortgage Co. has finalized a $325-million settlement of allegations that it deceived borrowers, falsified loan documents and pressured appraisers to overstate home values. A task force of 49 states and the District of Columbia plans to announce Monday that the Orange-based company and two affiliates all specialists in higher-cost mortgages to borrowers unable to qualify for bank loans had agreed to overhaul their lending practices. Industry experts say the deal could in effect force rival lenders in the higher-cost loan market to adopt similar standards to avoid legal challenges from both regulators and consumers. These loans have been the fastest-growing segment of the mortgage market and now account for an estimated 20% of all such lending. Settling the case also is expected to clear the way for Ameriquest's founder, Los Angeles billionaire Roland E. Arnall, to become the U.S. ambassador to the Netherlands. The settlement is expected to be disclosed by California Atty. Gen. Bill Lockyer, Iowa Atty. Gen. Tom Miller and others at a Los Angeles news conference Monday. According to people familiar with the agreement, key provisions will include appointment of an independent monitor to ensure compliance, and new rules forcing loan agents to give better disclosure of mortgage terms to customers throughout the approval process. Under the deal, hundreds of thousands of customers could be eligible for refunds. The agreement would also: Prohibit Ameriquest from offering incentives that might encourage loan officers to unfairly impose higher fees, closing costs or early payoff penalties on customers. Ban "unreasonable" sales quotas for loan officers, and bar regional loan supervisors from setting quotas that exceed those set by corporate headquarters. Centralize property appraisals so that loan officers can't influence appraisers to inflate home values, and require the use of outside agents to close mortgages to ensure borrowers aren't pressured by their loan agent into signing final papers. Ban Ameriquest or its employees from colluding with debt collectors to pressure borrowers into refinancing. The settlement would be the second-largest to date involving a mortgage loan company, after a $484-million pact signed by Household International and 50 states in 2002. "This agreement is good for consumers and good for the company," Ameriquest said in a statement Friday. "We worked closely with the states to address their concerns. These improved business practices will enhance our ability to serve our customers." The agreement is expected to apply to all states except for Virginia, where Ameriquest does not operate. The settlement terms are designed to address a variety of improper lending practices detailed in a series of Los Angeles Times articles in the last year. In those stories, former and current employees said that top-down pressure to boost loan sales created a "boiler room" atmosphere where workers forged documents, misled borrowers about rates and fees and inflated borrowers' incomes and home values to qualify them for loans they couldn't afford. The company acknowledged there had been problems but denied they were systematic. They attributed misdeeds to rogue employees disregarding company policies. The allegations against Ameriquest led Senate Democrats last fall to hold up a vote to confirm Arnall as the U.S. ambassador to the Netherlands. Arnall, a major contributor to President Bush, Gov. Arnold Schwarzenegger and other politicians, told the Senate Foreign Relations Committee at his confirmation hearing that Ameriquest already was making key reforms. Those included steps to centralize appraisals and to use independent agents to close loans, both of which are expected to be part of the settlement. Arnall, 66, founded Ameriquest in 1979 as Long Beach Savings. His Ameriquest Capital Corp., which includes several loan companies including Ameriquest Mortgage, has mushroomed into the nation's largest lender in the so-called sub-prime market. This is the market for borrowers who have credit problems, can't document their incomes, or want to borrow more money with less collateral than traditional lenders permit. The draft settlement classifies borrowers in two camps those who received loans from 1999 through the first quarter of 2003, and those who got loans after that period, when software designed to curb lending abuses was in effect. The first group about 235,000 borrowers, according to government mortgage data would share restitution of $175 million, or more than $700 each on average if all eligible borrowers accepted the settlement. A national administrator would determine how those funds would be allocated. An additional $120 million would be set aside so that states could devise formulas of their own to refund borrowers or refinance their loans. That group would include borrowers with loans from April 1, 2003, to the present a larger group, reflecting three years in which Ameriquest rose to become the top sub-prime lender. Borrowers would get letters informing them of the minimum amount to expect if they agreed to the settlement. To get the money, they would have to waive their right to sue Ameriquest. Borrowers forced into foreclosure proceedings because of alleged abuses would retain their right to sue. In the case of Household, payments averaged about $1,500 for each eligible borrower who accepted the settlement, said Kathleen Rizzo Young, a spokeswoman for HSBC Group, Household's parent company. The settlement applies to Ameriquest Mortgage, Town & Country Credit Corp. and AMC Mortgage Services Inc. (formerly known as Bedford Home Loans), all subsidiaries of Ameriquest Capital Corp. The three companies' immediate parent, ACC Capital Holdings Corp., is a party to the agreement as well. *Special correspondent Mike Hudson contributed to this report.

An Ameriquest Settlement: Storm Clouds on the Horizon by Edward J. Davidson Ameriquest's recent announcement that they have set aside $325 million dollars to settle predatory lending and appraisal inflation charges, brought by 33 State Attorney Generals and the District of Columbia, is a sign of changing times within the mortgage loan industry. This settlement will force lenders, real estate agents, mortgage brokers, title companies and appraisers to break old habits that have been breaking laws -- laws long on the Legislature's books of mortgage dos and don'ts. Since the early 1990s, community groups, followed by federal regulators, have railed against lenders who have targeted mostly low-income, minority and elderly borrowers with misleading marketing and intense pressure to purchase high-interest loans. For the past three years, similar warnings against inflated appraisals have been issued from not just activists and regulators but also from the appraisers themselves. By the year 2005 well over 8,000 appraisers signed a petition claiming that lenders and others involved in the mortgage loan process were pressing them to "hit the number" on properties sold in communities all across the country. In 2003, a leading provider of market intelligence to the real estate services industry, October Research, surveyed 500 appraisers who said over half of them had been pressured to inflate values by up to 10 percent, at the request of someone who stood to gain from the increased price -- everyone with the exception of the borrower and the appraiser, who receives a flat fee for services. In 1994 the Agencies that regulate the housing industry, which includes the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift Supervision (OTS) issued Interagency Appraisal and Evaluation Guidelines that provided guidance to both examiners and regulated institutions about prudent appraisal and evaluation programs. In 2003 the same agencies and the National Credit Union Administration (NCUA) issued an Advisory Letter on the subject of Independent Appraisal Valuation and Functions. It stated that a key element of a bank's appraisal and real estate program must be that the appraisers selected are independent of the transaction, and not subject to internal or external influence. In other words, the regulators told lenders: Ensure that the people setting the price are not influenced by those people who benefit from a higher-priced loan. In response, Ameriquest, like many lenders, did little more than allow production to dictate valuation practices, and while many of those ill-gotten practices have been covered-up by a rapidly increasing real estate market, in a declining market they will lead to disaster. Insulating appraisals from external pressure requires major structural and systematic changes. I have worked in the appraisal business for over three decades and strongly urge all of us in the mortgage, real estate and appraisal industries to do the following: Create appraisal processes that are managed and audited not by those who report to production executives; but to the Chief Financial Officer, or the Compliance Officer. Create a "Brick Wall" between appraisal staffs and production, mortgage brokers or real estate agents. Appraisers must go through a re-certification process on a regular basis to stay abreast of federal, state and local laws governing appraisals and industry trends in real estate valuation and appraisal technologies. The use of appraisal vendors that also receive thousands of dollars from title premiums, only if the loan is made, must be monitored. Selection of valuation products should not compromise the safety and soundness of lending practices. Automated Valuation Models (AVMs) and Brokers Price Opinions (BPOs) can and should not, in many circumstances, take the place of a valuation completed by qualified independent local fee appraisers. House prices are declining in many cities across the country. As a result, homeowners are losing equity in their homes. Given increasing concerns about rising defaults and foreclosures in 2006, especially on homes highly leveraged by home equity loans or financed with zero-down/interest only mortgages, it is time to finally take real action to stop improper valuation practices. Every Chief Financial Officer, Chief Compliance Officer, General Counsel and Auditor need take notice and action, using Ameriquest as their bellwether. Published: January 9, 2006 Copyright 2006 Realty Times. All Rights Reserved. ======================== This is Great!

December 14, 2005 latimes.com : Ameriquest May Refund $295 Million A proposal to settle claims of overcharges requires the lender to change its practices. By E. Scott Reckard and Christian Berthelsen, Times Staff Writers Ameriquest Mortgage Co. would overhaul its business practices under supervision of an outside monitor to settle allegations by 33 states that it overcharged its home loan customers and pressured appraisers to inflate property values, according to a draft of the settlement. The proposed deal includes a payment of $325 million $295 million to repay borrowers and $30 million to cover the cost of the states' investigation, according to a copy of the proposal obtained by The Times. It would be the second-largest settlement of its kind, after Household International's $484-million agreement in 2002 with attorneys general for all 50 states. Once approved, the deal is expected to help clear the way for company founder Roland E. Arnall to be confirmed as ambassador to the Netherlands. A Senate vote on the nomination was sidelined after Democrats on the Foreign Relations Committee said Arnall's company should first settle the probe. State officials who negotiated for months with the Orange-based lender had hoped that both sides would approve the deal by the end of this week. But the current version, the fifth revision of the deal, was written by the states, and Ameriquest isn't satisfied yet, said Iowa Atty. Gen. Tom Miller, the leader of the multi-state task force. "Some terms still could change," Miller said Tuesday, predicting the final agreement won't be signed until January. Ameriquest spokesman Chris Orlando said that although the settlement wasn't complete, the company believed that further discussions would yield a "well thought-out, comprehensive agreement that is good for consumers and fair to the company." The draft proposal provides, for the first time, details of provisions that had been described only in general terms by representatives of the company and the states. It would: Reshape Ameriquest's compensation practices, barring the company from rewarding employees for jacking up loan fees and interest rates and adding penalties for paying off a loan early. Place restrictions on what loan agents can tell borrowers, requiring them for example not to say their loans are "better," "lower than" or "competitive with" other lenders unless that is true. Attempt to keep Ameriquest loan agents from pressuring appraisers to inflate home values by barring them from discussing valuations with the people performing them and by requiring regular reviews of appraisers' work. Require the appointment of an independent monitor, funded by the company, "with broad discretion to review Ameriquest's operations to ensure that the company complies with the terms of this settlement." Ameriquest previously has reported setting aside $325 million for the settlement. The draft proposal includes the first details of how that would be spent: $230 million to repay borrowers, $65 million that states would use for additional borrower restitution or replacement loans and $30 million for the states' costs. People familiar with the negotiations cautioned that terms, including the provision for an outside monitor, were still subject to change. Ameriquest is one of the nation's biggest lenders in the fast-growing "sub-prime" market to people with credit blemishes, frequent job changes or other issues that prevent them from getting traditional "prime" mortgage loans. These customers are considered to have above-average risk, and they pay higher interest rates and fees as a result. Former Ameriquest loan officers have told The Times that relentless pressure to make loans created a "boiler room" atmosphere at the company, leading loan agents to deceive customers and push appraisers to inflate property value estimates to help close deals. At a Senate hearing this fall, Arnall conceded that "some of our employees did not do the right thing" but that the company had taken action to prevent abuses from occurring again. "There already is general agreement on a set of prospective measures that will be a model for the lending industry," he told the committee. Several attorneys general have said the settlement's "best practices" would go well beyond those found in earlier agreements when sub-prime lenders ran afoul of regulators and community groups. In one such case, Ameriquest made peace with a critical nonprofit group, the Assn. of Community Organizations for Reform Now, in 2000 by pledging to adopt practices that would serve as a model for the industry. Consumer advocates said the provision for an independent monitor was key to the agreement. The only way to ensure that the settlement is "not merely a piece of paper" is for the states to make sure that an aggressive monitor gets appointed and then be willing to reopen the case if the monitor finds compliance problems, said Ira Rheingold, general counsel of the National Assn. of Consumer Advocates, which represents attorneys who frequently sue lenders. Bob Gnaizda, policy director of the Greenlining Institute in Berkeley, which lobbies on behalf of low-income communities, said the independent monitor should also be empowered to watch over what he called Ameriquest's misleading ad campaigns. Those ads bill Ameriquest as the "Proud Sponsor of the American Dream" but often don't mention that it focuses almost exclusively on higher-cost sub-prime loans. The company, which also sponsors Major League Baseball and the Rolling Stones on tour, has said that its advertising taken as a whole is not misleading for borrowers. Industry groups Tuesday declined to speak about the specifics of the pending settlement, awaiting further details. But Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn., said lenders already are "committed to fair, nondiscriminatory lending." Hobbs said his association was planning a major push to educate consumers about the realities of borrowing, as a way to prevent misunderstandings. "We recognize that people out there are not as educated as they should be," he said. "We're taking responsibility for that." Times staff writer Jonathan Peterson and special correspondent Mike Hudson contributed to this report. (BEGIN TEXT OF INFOBOX) The draft settlement Here are highlights of a draft $325-million settlement between state authorities and Ameriquest. Terms are still subject to change. Disclosure: Borrowers would be given specific language explaining loan terms, including penalties for paying off a loan early. Pay practices: Ameriquest would not be allowed to pay employees extra for generating loans with prepayment penalties or rates and fees higher than what it usually charges. Appraisals: Loan sales agents would be barred from trying to influence the results of home appraisals, and Ameriquest would be required to set up a centralized appraisal process to help ensure accurate estimates. Quotas: Branch offices would not be able to set their own quotas for loan production, and the company could not require workers to complete "an unreasonable number of loan applications." Compliance: An independent monitor would ensure compliance with the agreement. Los Angeles Times

December 14, 2005 latimes.com : Ameriquest May Refund $295 Million A proposal to settle claims of overcharges requires the lender to change its practices. By E. Scott Reckard and Christian Berthelsen, Times Staff Writers Ameriquest Mortgage Co. would overhaul its business practices under supervision of an outside monitor to settle allegations by 33 states that it overcharged its home loan customers and pressured appraisers to inflate property values, according to a draft of the settlement. The proposed deal includes a payment of $325 million $295 million to repay borrowers and $30 million to cover the cost of the states' investigation, according to a copy of the proposal obtained by The Times. It would be the second-largest settlement of its kind, after Household International's $484-million agreement in 2002 with attorneys general for all 50 states. Once approved, the deal is expected to help clear the way for company founder Roland E. Arnall to be confirmed as ambassador to the Netherlands. A Senate vote on the nomination was sidelined after Democrats on the Foreign Relations Committee said Arnall's company should first settle the probe. State officials who negotiated for months with the Orange-based lender had hoped that both sides would approve the deal by the end of this week. But the current version, the fifth revision of the deal, was written by the states, and Ameriquest isn't satisfied yet, said Iowa Atty. Gen. Tom Miller, the leader of the multi-state task force. "Some terms still could change," Miller said Tuesday, predicting the final agreement won't be signed until January. Ameriquest spokesman Chris Orlando said that although the settlement wasn't complete, the company believed that further discussions would yield a "well thought-out, comprehensive agreement that is good for consumers and fair to the company." The draft proposal provides, for the first time, details of provisions that had been described only in general terms by representatives of the company and the states. It would: Reshape Ameriquest's compensation practices, barring the company from rewarding employees for jacking up loan fees and interest rates and adding penalties for paying off a loan early. Place restrictions on what loan agents can tell borrowers, requiring them for example not to say their loans are "better," "lower than" or "competitive with" other lenders unless that is true. Attempt to keep Ameriquest loan agents from pressuring appraisers to inflate home values by barring them from discussing valuations with the people performing them and by requiring regular reviews of appraisers' work. Require the appointment of an independent monitor, funded by the company, "with broad discretion to review Ameriquest's operations to ensure that the company complies with the terms of this settlement." Ameriquest previously has reported setting aside $325 million for the settlement. The draft proposal includes the first details of how that would be spent: $230 million to repay borrowers, $65 million that states would use for additional borrower restitution or replacement loans and $30 million for the states' costs. People familiar with the negotiations cautioned that terms, including the provision for an outside monitor, were still subject to change. Ameriquest is one of the nation's biggest lenders in the fast-growing "sub-prime" market to people with credit blemishes, frequent job changes or other issues that prevent them from getting traditional "prime" mortgage loans. These customers are considered to have above-average risk, and they pay higher interest rates and fees as a result. Former Ameriquest loan officers have told The Times that relentless pressure to make loans created a "boiler room" atmosphere at the company, leading loan agents to deceive customers and push appraisers to inflate property value estimates to help close deals. At a Senate hearing this fall, Arnall conceded that "some of our employees did not do the right thing" but that the company had taken action to prevent abuses from occurring again. "There already is general agreement on a set of prospective measures that will be a model for the lending industry," he told the committee. Several attorneys general have said the settlement's "best practices" would go well beyond those found in earlier agreements when sub-prime lenders ran afoul of regulators and community groups. In one such case, Ameriquest made peace with a critical nonprofit group, the Assn. of Community Organizations for Reform Now, in 2000 by pledging to adopt practices that would serve as a model for the industry. Consumer advocates said the provision for an independent monitor was key to the agreement. The only way to ensure that the settlement is "not merely a piece of paper" is for the states to make sure that an aggressive monitor gets appointed and then be willing to reopen the case if the monitor finds compliance problems, said Ira Rheingold, general counsel of the National Assn. of Consumer Advocates, which represents attorneys who frequently sue lenders. Bob Gnaizda, policy director of the Greenlining Institute in Berkeley, which lobbies on behalf of low-income communities, said the independent monitor should also be empowered to watch over what he called Ameriquest's misleading ad campaigns. Those ads bill Ameriquest as the "Proud Sponsor of the American Dream" but often don't mention that it focuses almost exclusively on higher-cost sub-prime loans. The company, which also sponsors Major League Baseball and the Rolling Stones on tour, has said that its advertising taken as a whole is not misleading for borrowers. Industry groups Tuesday declined to speak about the specifics of the pending settlement, awaiting further details. But Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn., said lenders already are "committed to fair, nondiscriminatory lending." Hobbs said his association was planning a major push to educate consumers about the realities of borrowing, as a way to prevent misunderstandings. "We recognize that people out there are not as educated as they should be," he said. "We're taking responsibility for that." Times staff writer Jonathan Peterson and special correspondent Mike Hudson contributed to this report. (BEGIN TEXT OF INFOBOX) The draft settlement Here are highlights of a draft $325-million settlement between state authorities and Ameriquest. Terms are still subject to change. Disclosure: Borrowers would be given specific language explaining loan terms, including penalties for paying off a loan early. Pay practices: Ameriquest would not be allowed to pay employees extra for generating loans with prepayment penalties or rates and fees higher than what it usually charges. Appraisals: Loan sales agents would be barred from trying to influence the results of home appraisals, and Ameriquest would be required to set up a centralized appraisal process to help ensure accurate estimates. Quotas: Branch offices would not be able to set their own quotas for loan production, and the company could not require workers to complete "an unreasonable number of loan applications." Compliance: An independent monitor would ensure compliance with the agreement. Los Angeles Times

December 14, 2005 latimes.com : Ameriquest May Refund $295 Million A proposal to settle claims of overcharges requires the lender to change its practices. By E. Scott Reckard and Christian Berthelsen, Times Staff Writers Ameriquest Mortgage Co. would overhaul its business practices under supervision of an outside monitor to settle allegations by 33 states that it overcharged its home loan customers and pressured appraisers to inflate property values, according to a draft of the settlement. The proposed deal includes a payment of $325 million $295 million to repay borrowers and $30 million to cover the cost of the states' investigation, according to a copy of the proposal obtained by The Times. It would be the second-largest settlement of its kind, after Household International's $484-million agreement in 2002 with attorneys general for all 50 states. Once approved, the deal is expected to help clear the way for company founder Roland E. Arnall to be confirmed as ambassador to the Netherlands. A Senate vote on the nomination was sidelined after Democrats on the Foreign Relations Committee said Arnall's company should first settle the probe. State officials who negotiated for months with the Orange-based lender had hoped that both sides would approve the deal by the end of this week. But the current version, the fifth revision of the deal, was written by the states, and Ameriquest isn't satisfied yet, said Iowa Atty. Gen. Tom Miller, the leader of the multi-state task force. "Some terms still could change," Miller said Tuesday, predicting the final agreement won't be signed until January. Ameriquest spokesman Chris Orlando said that although the settlement wasn't complete, the company believed that further discussions would yield a "well thought-out, comprehensive agreement that is good for consumers and fair to the company." The draft proposal provides, for the first time, details of provisions that had been described only in general terms by representatives of the company and the states. It would: Reshape Ameriquest's compensation practices, barring the company from rewarding employees for jacking up loan fees and interest rates and adding penalties for paying off a loan early. Place restrictions on what loan agents can tell borrowers, requiring them for example not to say their loans are "better," "lower than" or "competitive with" other lenders unless that is true. Attempt to keep Ameriquest loan agents from pressuring appraisers to inflate home values by barring them from discussing valuations with the people performing them and by requiring regular reviews of appraisers' work. Require the appointment of an independent monitor, funded by the company, "with broad discretion to review Ameriquest's operations to ensure that the company complies with the terms of this settlement." Ameriquest previously has reported setting aside $325 million for the settlement. The draft proposal includes the first details of how that would be spent: $230 million to repay borrowers, $65 million that states would use for additional borrower restitution or replacement loans and $30 million for the states' costs. People familiar with the negotiations cautioned that terms, including the provision for an outside monitor, were still subject to change. Ameriquest is one of the nation's biggest lenders in the fast-growing "sub-prime" market to people with credit blemishes, frequent job changes or other issues that prevent them from getting traditional "prime" mortgage loans. These customers are considered to have above-average risk, and they pay higher interest rates and fees as a result. Former Ameriquest loan officers have told The Times that relentless pressure to make loans created a "boiler room" atmosphere at the company, leading loan agents to deceive customers and push appraisers to inflate property value estimates to help close deals. At a Senate hearing this fall, Arnall conceded that "some of our employees did not do the right thing" but that the company had taken action to prevent abuses from occurring again. "There already is general agreement on a set of prospective measures that will be a model for the lending industry," he told the committee. Several attorneys general have said the settlement's "best practices" would go well beyond those found in earlier agreements when sub-prime lenders ran afoul of regulators and community groups. In one such case, Ameriquest made peace with a critical nonprofit group, the Assn. of Community Organizations for Reform Now, in 2000 by pledging to adopt practices that would serve as a model for the industry. Consumer advocates said the provision for an independent monitor was key to the agreement. The only way to ensure that the settlement is "not merely a piece of paper" is for the states to make sure that an aggressive monitor gets appointed and then be willing to reopen the case if the monitor finds compliance problems, said Ira Rheingold, general counsel of the National Assn. of Consumer Advocates, which represents attorneys who frequently sue lenders. Bob Gnaizda, policy director of the Greenlining Institute in Berkeley, which lobbies on behalf of low-income communities, said the independent monitor should also be empowered to watch over what he called Ameriquest's misleading ad campaigns. Those ads bill Ameriquest as the "Proud Sponsor of the American Dream" but often don't mention that it focuses almost exclusively on higher-cost sub-prime loans. The company, which also sponsors Major League Baseball and the Rolling Stones on tour, has said that its advertising taken as a whole is not misleading for borrowers. Industry groups Tuesday declined to speak about the specifics of the pending settlement, awaiting further details. But Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn., said lenders already are "committed to fair, nondiscriminatory lending." Hobbs said his association was planning a major push to educate consumers about the realities of borrowing, as a way to prevent misunderstandings. "We recognize that people out there are not as educated as they should be," he said. "We're taking responsibility for that." Times staff writer Jonathan Peterson and special correspondent Mike Hudson contributed to this report. (BEGIN TEXT OF INFOBOX) The draft settlement Here are highlights of a draft $325-million settlement between state authorities and Ameriquest. Terms are still subject to change. Disclosure: Borrowers would be given specific language explaining loan terms, including penalties for paying off a loan early. Pay practices: Ameriquest would not be allowed to pay employees extra for generating loans with prepayment penalties or rates and fees higher than what it usually charges. Appraisals: Loan sales agents would be barred from trying to influence the results of home appraisals, and Ameriquest would be required to set up a centralized appraisal process to help ensure accurate estimates. Quotas: Branch offices would not be able to set their own quotas for loan production, and the company could not require workers to complete "an unreasonable number of loan applications." Compliance: An independent monitor would ensure compliance with the agreement. Los Angeles Times

December 14, 2005 latimes.com : Ameriquest May Refund $295 Million A proposal to settle claims of overcharges requires the lender to change its practices. By E. Scott Reckard and Christian Berthelsen, Times Staff Writers Ameriquest Mortgage Co. would overhaul its business practices under supervision of an outside monitor to settle allegations by 33 states that it overcharged its home loan customers and pressured appraisers to inflate property values, according to a draft of the settlement. The proposed deal includes a payment of $325 million $295 million to repay borrowers and $30 million to cover the cost of the states' investigation, according to a copy of the proposal obtained by The Times. It would be the second-largest settlement of its kind, after Household International's $484-million agreement in 2002 with attorneys general for all 50 states. Once approved, the deal is expected to help clear the way for company founder Roland E. Arnall to be confirmed as ambassador to the Netherlands. A Senate vote on the nomination was sidelined after Democrats on the Foreign Relations Committee said Arnall's company should first settle the probe. State officials who negotiated for months with the Orange-based lender had hoped that both sides would approve the deal by the end of this week. But the current version, the fifth revision of the deal, was written by the states, and Ameriquest isn't satisfied yet, said Iowa Atty. Gen. Tom Miller, the leader of the multi-state task force. "Some terms still could change," Miller said Tuesday, predicting the final agreement won't be signed until January. Ameriquest spokesman Chris Orlando said that although the settlement wasn't complete, the company believed that further discussions would yield a "well thought-out, comprehensive agreement that is good for consumers and fair to the company." The draft proposal provides, for the first time, details of provisions that had been described only in general terms by representatives of the company and the states. It would: Reshape Ameriquest's compensation practices, barring the company from rewarding employees for jacking up loan fees and interest rates and adding penalties for paying off a loan early. Place restrictions on what loan agents can tell borrowers, requiring them for example not to say their loans are "better," "lower than" or "competitive with" other lenders unless that is true. Attempt to keep Ameriquest loan agents from pressuring appraisers to inflate home values by barring them from discussing valuations with the people performing them and by requiring regular reviews of appraisers' work. Require the appointment of an independent monitor, funded by the company, "with broad discretion to review Ameriquest's operations to ensure that the company complies with the terms of this settlement." Ameriquest previously has reported setting aside $325 million for the settlement. The draft proposal includes the first details of how that would be spent: $230 million to repay borrowers, $65 million that states would use for additional borrower restitution or replacement loans and $30 million for the states' costs. People familiar with the negotiations cautioned that terms, including the provision for an outside monitor, were still subject to change. Ameriquest is one of the nation's biggest lenders in the fast-growing "sub-prime" market to people with credit blemishes, frequent job changes or other issues that prevent them from getting traditional "prime" mortgage loans. These customers are considered to have above-average risk, and they pay higher interest rates and fees as a result. Former Ameriquest loan officers have told The Times that relentless pressure to make loans created a "boiler room" atmosphere at the company, leading loan agents to deceive customers and push appraisers to inflate property value estimates to help close deals. At a Senate hearing this fall, Arnall conceded that "some of our employees did not do the right thing" but that the company had taken action to prevent abuses from occurring again. "There already is general agreement on a set of prospective measures that will be a model for the lending industry," he told the committee. Several attorneys general have said the settlement's "best practices" would go well beyond those found in earlier agreements when sub-prime lenders ran afoul of regulators and community groups. In one such case, Ameriquest made peace with a critical nonprofit group, the Assn. of Community Organizations for Reform Now, in 2000 by pledging to adopt practices that would serve as a model for the industry. Consumer advocates said the provision for an independent monitor was key to the agreement. The only way to ensure that the settlement is "not merely a piece of paper" is for the states to make sure that an aggressive monitor gets appointed and then be willing to reopen the case if the monitor finds compliance problems, said Ira Rheingold, general counsel of the National Assn. of Consumer Advocates, which represents attorneys who frequently sue lenders. Bob Gnaizda, policy director of the Greenlining Institute in Berkeley, which lobbies on behalf of low-income communities, said the independent monitor should also be empowered to watch over what he called Ameriquest's misleading ad campaigns. Those ads bill Ameriquest as the "Proud Sponsor of the American Dream" but often don't mention that it focuses almost exclusively on higher-cost sub-prime loans. The company, which also sponsors Major League Baseball and the Rolling Stones on tour, has said that its advertising taken as a whole is not misleading for borrowers. Industry groups Tuesday declined to speak about the specifics of the pending settlement, awaiting further details. But Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn., said lenders already are "committed to fair, nondiscriminatory lending." Hobbs said his association was planning a major push to educate consumers about the realities of borrowing, as a way to prevent misunderstandings. "We recognize that people out there are not as educated as they should be," he said. "We're taking responsibility for that." Times staff writer Jonathan Peterson and special correspondent Mike Hudson contributed to this report. (BEGIN TEXT OF INFOBOX) The draft settlement Here are highlights of a draft $325-million settlement between state authorities and Ameriquest. Terms are still subject to change. Disclosure: Borrowers would be given specific language explaining loan terms, including penalties for paying off a loan early. Pay practices: Ameriquest would not be allowed to pay employees extra for generating loans with prepayment penalties or rates and fees higher than what it usually charges. Appraisals: Loan sales agents would be barred from trying to influence the results of home appraisals, and Ameriquest would be required to set up a centralized appraisal process to help ensure accurate estimates. Quotas: Branch offices would not be able to set their own quotas for loan production, and the company could not require workers to complete "an unreasonable number of loan applications." Compliance: An independent monitor would ensure compliance with the agreement. Los Angeles Times