Ameriquest Settles With Borrowers for $325 Million
By Foreclosure-Fighter Staff Writer
Checks are in the mail for the borrowers in every state (except Virginia) and the District of Columbia who were victimized by the unacceptable lending practices of Ameriquest Mortgage Company, once the largest subprime lender in the United States.
An investigation begun by the Minnesota Attorney General's office resulted in a $325 million dollar settlement between Ameriquest and the thousands of borrowers who were exposed to predatory lending and/or mortgage fraud by Ameriquest.
The investigation began as a reaction to the foreclosure crisis currently sweeping the nation, which is expected to cause about 2.2 million homeowners to lose their homes to foreclosure in the coming years.
It resulted in a lawsuit that accused Ameriquest of concealing the terms of its loans, insufficiently disclosing loan terms, and providing borrowers with falsely-inflated house appraisals. Now, Ameriquest has agreed to pay restitution to those who took out mortgages between January 1, 1999 and December 31, 2005.
In addition to the financial compensation to borrowers, Ameriquest has accepted a set of guidelines meant to eliminate all predatory and fraudulent mortgage lending practices.
The agreement, available at this link, includes strict disclosure standards for lenders. Lenders are now required to inform borrowers both orally and in writing about the terms and amounts of their loans. For loans with adjustable rate payments, lenders must reveal when and how often the loans will reset.
Lenders are also required to inform borrowers taking out ARMs that they might qualify for fixed-rate or prime loans—in other words, lenders have to let borrowers know what's going on.
Some of the other terms of the settlement include:
- Lenders must notify borrowers of any changes in the terms of a loan in a timely manner. Additionally, for loans made through written or electronic channels, notification must be given through these same channels.
- Ameriquest cannot advertise its loans or rates as "better," "cheaper," or "more competitive," than those of its competitors, unless there is evidence that such descriptions are true.
- All home appraisals must be made by someone from the list of approved appraisers for each state, and must be impartial. Lenders must take reasonable measures to make sure appraisals are accurate.
- Lenders must accurately represent a borrower's income and credit rating. Using "stated income" or otherwise falsely inflating a borrower's financial assets is not permitted.
- Lenders cannot sign any documents on behalf of borrowers.
- Lenders can continue to make Price Exceptions, but cannot make such exceptions for more than 30% of borrowers.
- Lenders are forbidden to attempt to persuade prime borrowers to refinance into a subprime loan within a certain time period, unless the lender has adequate evidence that the borrower was already interested in refinancing.
The new restrictions also call for penalties up to dismissal for any employees of Ameriquest who choose to ignore the terms of the settlement.
Settlement checks were mailed out on December 13th and 14th in most states. If you believe you are eligible for a check from Ameriquest, you should visit the official settlement website for more information.