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 firms 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 acknowledged 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 america 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 correct factor.” Ameriquest incessantly reiterated that their clients have been “greater than a quantity,” producing a sequence of commercials with the theme “Do not choose 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 Seashore Financial savings & Mortgage. After transferring to Lengthy Seashore, California and being transformed to a pure mortgage lender in 1994, the corporate was renamed Lengthy Seashore 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 Seashore Financial savings & Mortgage was subsequently reorganized into three divisions below the auspices of ACC Capital Holdings, a personal conglomerate owned completely by Arnall: Ameriquest Mortgage Firm (retail banking), Argent Mortgage (wholesale banking), and AMC Mortgage Providers (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 Providers, shutting down Ameriquest Mortgage.
Predatory lending allegation
In 1996, the corporate agreed to pay $3 million into an “instructional fund” to settle a Justice Division lawsuit accusing it of gouging and predatory lending practices in opposition to older, feminine, and minority debtors. Prosecutors accused it of permitting mortgage brokers and its personal workers to cost these clients an extra price of as a lot as 12 % of the mortgage quantity. As a part of the settlement, Ameriquest (then nonetheless often called Lengthy Seashore Mortgage) agreed to make use of the academic fund to coach its workers in correct mortgage strategies and to chorus from using predatory lending strategies, however solely throughout the State of California. Shortly after coming into into this settlement settlement, the corporate “switched” names with its subsidiary and commenced aggressively in search of refinance-mortgage enterprise all through america.
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 will 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 a minimum of 5 of these states—California, Connecticut, Georgia, Massachusetts, and Florida—Ameriquest had already settled multimillion-dollar fits. Federal Housing Administration commissioner Brian Montgomery acknowledged that the settlement strengthened his concern that the business was exploiting debtors and that he was “shocked to seek out these clients had been lured away by the ‘idiot’s gold’ of subprime loans”.
In Might 2006, Ameriquest Mortgage introduced it was closing all of its retail places of work and sooner or later would make its loans by mortgage brokers, a channel not lined by the predatory-lending settlement.
On June 13, 2007, legal professionals for debtors in search of 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 might have been on the coronary heart of the monetary disaster of 2007 to 2010.
Ameriquest operated the Hovering Goals Fund, which donated cash to initiatives that assist kids.[vague] In the course of the 2006 NASCAR Busch Sequence season, the fund was promoted on race automobiles, whose designs have been picked in a contest.
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- Reckard, E. Scott (June 19, 2007). “Lawsuit units sights on Ameriquest founder”. Los Angeles Instances. Retrieved 28 Might 2018.