American subprime mortgage lender
Ameriquest was one of many largest United States sub-prime mortgage lenders till its dissolution in September 2007. Among the many first mortgage corporations using computer systems to solicit potential debtors and hasten the mortgage software course of, Ameriquest was accused of predatory lending practices by United States banking regulators. The corporate was notable for its promotion of the said revenue mortgage, whereby potential debtors have been allowed to say revenue with out verification of employment. The proliferation of lending to clients with marginal creditworthiness proved to be not solely a key issue resulting in the 2007 subprime mortgage monetary disaster, but in addition a catalyst to Ameriquest’s personal demise.
Ameriquest was broadly identified all through the United States for its promotional exercise. It marketed broadly on tv; flew blimps over soccer and baseball stadiums; and sponsored the Rolling Stones’ A Greater Bang tour, the Tremendous Bowl XXXIX halftime present, and NASCAR drivers. Its advert slogan was “proud sponsor of the American dream,” and its firm motto was “do the appropriate factor.” Ameriquest ceaselessly reiterated that their clients have been “greater than a quantity,” producing a collection of commercials with the theme “Do not decide too rapidly. We can’t.”
Ameriquest was based in 1979 by Roland Arnall, in Orange County, California, as a financial savings and mortgage affiliation, or thrift, known as Lengthy Seaside Financial savings & Mortgage. After transferring to Lengthy Seaside, California and being transformed to a pure mortgage lender in 1994, the corporate was renamed Lengthy Seaside Mortgage Co. In 1997, the division that funded loans made by unbiased brokers was spun off right into a publicly traded firm that was in the end bought by Washington Mutual in 1999.
Lengthy Seaside Financial savings & Mortgage was subsequently reorganized into three divisions below the auspices of ACC Capital Holdings, a non-public conglomerate owned solely by Arnall: Ameriquest Mortgage Firm (retail banking), Argent Mortgage (wholesale banking), and AMC Mortgage Companies (mortgage servicing).
In 2004 alone, Ameriquest was estimated to have originated over $50 billion in new subprime mortgages.
The house stadium of the Texas Rangers was known as Ameriquest Subject till March 19, 2007, when Ameriquest relinquished naming rights. The stadium was renamed Rangers Ballpark in Arlington and subsequently Globe Life Park in Arlington.
On September 1, 2007, Citigroup accomplished its acquisition of Argent Mortgage and AMC Mortgage Companies, shutting down Ameriquest Mortgage.
Predatory lending allegation
In 1996, the corporate agreed to pay $3 million into an “academic fund” to settle a Justice Division lawsuit accusing it of gouging and predatory lending practices towards older, feminine, and minority debtors. Prosecutors accused it of permitting mortgage brokers and its personal workers to cost these clients a further payment of as a lot as 12 % of the mortgage quantity. As a part of the settlement, Ameriquest (then nonetheless generally known as Lengthy Seaside Mortgage) agreed to make use of the academic fund to coach its workers in correct mortgage methods and to chorus from using predatory lending methods, however solely inside the State of California. Shortly after coming into into this settlement settlement, the corporate “switched” names with its subsidiary and commenced aggressively looking for refinance-mortgage enterprise all through the USA.
In 2001, after being investigated by the Federal Commerce Fee, the corporate settled a dispute with ACORN, a nationwide group of neighborhood teams, promising to supply $360 million in low-cost loans.
In February 2005, reporters Michael Hudson and E. Scott Reckard broke a narrative within the Los Angeles Instances about “boiler room” gross sales ways at Ameriquest. Their investigation discovered proof that the corporate had undertaken numerous questionable practices, together with “deceiving debtors concerning the phrases of their loans, forging paperwork, falsifying value determinations and fabricating debtors’ revenue to qualify them for loans they could not afford.”
On 1 August 2005, Ameriquest introduced that it might put aside $325 million to settle investigations by 30 state attorneys normal into allegations that it had preyed on debtors by providing loans with hidden charges and balloon funds. In no less than 5 of these states—California, Connecticut, Georgia, Massachusetts, and Florida—Ameriquest had already settled multimillion-dollar fits. Federal Housing Administration commissioner Brian Montgomery said that the settlement strengthened his concern that the business was exploiting debtors and that he was “shocked to search out these clients had been lured away by the ‘idiot’s gold’ of subprime loans”.
In Could 2006, Ameriquest Mortgage introduced it was closing all of its retail workplaces and sooner or later would make its loans by way of mortgage brokers, a channel not lined by the predatory-lending settlement.
On June 13, 2007, legal professionals for debtors looking for class standing asserted in a submitting with the District Court docket for the Northern District of Illinois that “property of the Ameriquest entities have been transferred to Arnall with the precise intent to hinder, delay, or defraud the plaintiffs on this motion.”
Former Ameriquest workers alleged that they have been pushed to falsify paperwork on dangerous mortgages after which promote them to Wall Road banks trying to make quick earnings. There may be rising proof that such mortgage fraud could have been on the coronary heart of the monetary disaster of 2007 to 2010.
Ameriquest operated the Hovering Desires Fund, which donated cash to initiatives that assist kids.[vague] Through the 2006 NASCAR Busch Collection season, the fund was promoted on race automobiles, whose designs have been picked in a contest.
- “Historical past of the Lehman Brothers”. Harvard College Library-Lehman Brothers Assortment. Retrieved 2010-12-01.
- Paul Muolo and Mathew Padilla (2 February 2010). Chain of Blame. John Wiley & Sons, 2008, 2010. p. 86. ISBN 978-0-470-55465-4.
- “Street to Wreck: Mortgage Fraud Scandal Brewing”. American Information Challenge hosted by The Actual Information. Could 13, 2009.
- “Do not Decide Too Rapidly Humorous Commercials Compilation”. Retrieved 22 December 2017.
- Hudson, Mike; Reckard, E. Scott (February 4, 2005). “Staff say lender ran ’boiler rooms‘“. Los Angeles Instances. Retrieved 26 Could 2018.
- Reuters (2007-08-31). “Ameriquest, a Subprime Lender, Is Closing”. The New York Instances. ISSN 0362-4331. Retrieved 2018-05-15.
- Reckard, Scott E. (September 1, 2007). “Citi to purchase stays of Ameriquest”. Los Angeles Instances (C-1). Archived from the unique on September 10, 2008. Retrieved 26 Could 2018.
- Becker, Jo; Sheryl Homosexual Stolberg; Stephen Labaton (December 20, 2008). “White Home Philosophy Stoked Mortgage Bonfire”. New York Instances.
- Reckard, E. Scott (June 19, 2007). “Lawsuit units sights on Ameriquest founder”. Los Angeles Instances. Retrieved 28 Could 2018.
This web page was final edited on 9 February 2021, at 22:56