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Updated December 1, 2008 - For further
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Update of December 1,
2008: Robert Rubin has tried
to defend his $115 million in payola from Citigroup since 1999 by
minimizing
his role, while now saying, "I have told Vikram that I will remain part
of
this and try to be helpful." So the people who caused the problem just
stay on and keep getting paid. Contrary to his claim to be uninvolved,
Rubin
helped hook up Citigroup's purchase of notorious predatory lender
Ameriquest. A
"senior person who has no ax to grind," he calls himself. It's time
to face the axe, some say...
Update of
March 10, 2008: The ACJ notes that in September, Citigroup bought the
assets of the mortgage servicing company owned by Ameriquest's parent,
ACC Capital Holdings. It also bought the assets of Argent Mortgage.
That deal gave Citigroup the servicing rights for the Andronicas'
mortgage and $45 billion in other loans... A Citigroup spokeswoman said
Friday that the lender was awaiting information from the Andronicas to
"determine their eligibility for a modification." Kelly and David
Andronica think Citigroup should make things right, especially since
the problems with Ameriquest loans were well known when Citigroup
decided to buy the Ameriquest servicing company.
Update of December 17, 2007: Too
little, too late -- nearly two years after the Ameriquest settlement
was announced with fanfare by state attorneys general, now the
relatively small payments are being made. This is for loans from 1999
to 2005: that is, up to seven years ago. In
New Jersey, for example, 9,132 borrowers will receive a total of $12.2
million, according to Lee Moore of the New Jersey Office of the
Attorney General. The total awarded in Pennsylvania was $10.8 million
to 12,401 borrowers. You do the math...
Update of October 8, 2007: October's
Mortgage Servicing News reports that "Citigroup
has acquired the $45 billion subprime servicing portfolio of Ameriquest
Mortgage, a transaction that will help it challenge Countrywide
Financial Corp. for the No. 1 spot among B&C servicers... Citigroup
also purchased Argent Mortgage, a nonprime wholesale lender that is a
sister company to Ameriquest... By purchasing the Ameriquest
receivables, Citigroup will grow its subprime servicing portfolio to
about $110 billion. At the end of June, CFC serviced $125.6 billion in
subprime, ranking first in that niche... 'Exercising our option to
acquire the assets from ACH's wholesale origination and servicing
business allows Citi to secure valuable and scalable platforms in a
market undergoing significant change,' said Jeffrey Perlowitz, head of
global securitized markets for Citi's fixed income, currencies and
commodities division, where the assets will reside."
But why would Argent's origination capacity "reside" in Citigroup's
investment bank? We'll have more on this.
Update September 3, 2007: With
Subprime Hot Air in DC, Cold-Blooded Citigroup Buys Ameriquest
Byline: Matthew R. Lee of Inner City
Press
As President George W. Bush and Federal Reserve chairman Ben Bernanke
Friday wrung their hands in Washington about the subprime mortgage
meltdown, New York-based Citigroup announced it was buying a chunk of
admitted predatory lender Ameriquest. Citigroup is a meta-predator,
taking advantage of the foreclosure boom to scoop up one of the most
abusive lenders at a temporarily reduced price. The head of Citigroup's
"global securitized markets" unit, Jeffrey Perlowitz, said the takeover
"allows Citigroup to secure valuable and scalable platforms in a market
undergoing significant change." Some thought predatory lending was a
market being discredited and shrinking. To Citigroup, it's just change
that can be scaled up.
The founder of Ameriquest, Roland Arnall, who has made billions from
predatory lending, was nominated by President Bush as Ambassador to the
Netherlands. While a few U.S. Senators delayed his confirmation until
Ameriquest finalized a settlement with state attorneys general, now
Arnall will profit again, selling the remainder of the company to
Citigroup. The losers in the deal are the borrowers from whom Citigroup
will even more ruthlessly squeeze payments on loans that were
misleading and abusive from the start, and future borrowers whom
Citigroup will target with the ex-Ameriquest "scalable platform."
At Citigroup's annual shareholders' meeting on April 17, 2007, Chuck
Prince stood alone on the stage of Carnegie Hall, as Sandy Weill used
to do, and took questions. Inner City Press asked about Citigroup's
2006 lending record -- confining African Americans in New York to
higher cost loans 4.4 times more frequently than whites -- and about
Citigroup's then just announced proposal for "propping up and taking an
option in Argent," an affiliate of Ameriquest.
"Good question," Prince began. Argent "is a company that has
restructured itself. This is a company that has settled with
regulators." He said it is a situation of "good bank, bad bank" and
claimed that Citigroup is only thinking of buying the good part.
But it was
Ameriquest that announced reforms, none of which have been implemented
at Argent. Prince cut in. "We're not going to buy anything unless it's
cleaned up." So in the turbulent five months since, have Ameriquest and
Argent really been cleaned up? Or have prices hit bottom, leading
Citigroup to pounce? Prince said, "we've had reputation issues in
the distant past, we're not going down that road." And now, while other
wring their hands to come off as concerned, Citigroup is rushing
headlong with Ameriquest further down the road of predatory lending.
Update of July 16, 2007: The letters
and notices of the state attorneys general's $325 million settlement
with Ameriquest have started going out. The possible range of
settlements? $123 to $2,418. Of what use
is $123 to someone who's losing their home?
Update of May 21, 2007: From a
report last week, 2006 subprime mortgage volume and status of Argent/Ameriquest $25,507 Major
layoffs, losses, Citi has an option to buy
Update of May 7, 2007:
Ameriquest is up to its old tricks, this time in Washington State. Just
as Ameriquest and Argent sued in Texas to block the release to Inner
City Press of predatory lending-related document requested under
Freedom of Information laws, now Ameriquest and Argent are doing the
same out West. And this is the company that Citigroup has propped up
and wants to buy...
Update of April 23, 2007: At Citigroup's annual shareholders'
meeting on April 17, Chuck Prince stood alone on the stage of Carnegie
Hall, as Sandy Weill used to do. Prince propped up his presentation
with PowerPoint slides and two videos. The first was of Citigroup's
volunteer day in 100 countries, from Guam to Pakistan. The second was
of the new "Citi" brand, which Prince described as "representing
everything our company stands for."
Inner City Press asked how these state principles are consistent with
Citigroup's 2006 lending record -- confining African Americans in New
York to higher cost loans 4.4 times more frequently than whites -- and
with "propping up and taking an option in Argent," an affiliate of
admitted predatory lender Ameriquest.
"Good question," Prince began. Argent "is a company that has
restructured itself. This is a company that has settled with
regulators." He said it is a situation of "good bank, bad bank" and
claimed that Citigroup is only thinking of buying the good part.
But it was Ameriquest that announced reforms, none of which
have been implemented at Argent. Prince cut in. "We're not going to buy
anything unless it's cleaned up." Prince and Citigroup appear to
be in denial. Prince said, "we've had reputation issues in the distant
past, we're not going down that road." We'll see.
Update of
April 9, 2007: In a study of the
just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch
have identified disparities by race and ethnicity in the higher-cost
lending of some of the nation's largest banks. 2006 is the third year
in which the data distinguishes which loans are higher cost, over the
federally-defined rate spread of three percent over the yield on
Treasury securities of comparable duration on first lien loans, five
percent on subordinate liens. Among other findings, Argent Mortgage,
which Citigroup now has an option to buy. made 117,328 mortgages, of
which 107,530 or 91.65% were higher cost loans over the rate spread.
Update of
March 19, 2007: Notes from the subprime underground --
Subj: Ameriquest
Date: 3/17/2007 5:02:16 PM Eastern Standard Time
From: Name Withheld in this Format
To: Inner City Press
All of Ameriquest's retail lending division was
shut down this past Thursday (the "New Business Model"), and there were
additional mass layoffs across the remaining ACC business lines,
including Argent, of which their NY Operations located in White Plains
was closed that day as well.
The Orange County Register website has some
information, but it’s pretty candy coated. Just talks about how
relieved employees that they interviewed were that it's finally
over. Also, the Register mentions their "severance packages,"
they did not receive severance packages, they are on the payroll for 60
days only so the company compliant with the Fed & State WARN Acts,
beyond that, they just received the standard pay out of vacation &
sick time accrued -- no severance.
The
key line from the L.A. Times' story on the mass layoffs at ACC / Argent
/ Ameriquest: " By drastically cutting costs, the company could be
making itself a more viable candidate for a sale." Our take? This way
Citigroup gets the layoffs done before it acquires the company...
Update of
March 12, 2007: From Deval Patrick, following his $360,000 a year
part-time service on the board of directors of the predatory lender
Ameriquest / ACC: "As a former board member, I was asked by an officer
of ACC Capital to serve as a reference for the company and agreed to do
so. I called Robert Rubin, a former colleague from the Clinton
administration and an executive at Citigroup, to offer any insight they
might want on the character of the current management... I appreciate
that I should not have made the call."
Update of
March 5, 2007: "ACC Capital also said it has secured fresh working
capital from Citigroup's Markets and Banking Division and from ACC's
majority shareholder, who is Roland E. Arnall, the U.S. ambassador to
the Netherlands." Inner City Press: But wasn't Arnall supposed to be
out of business with Ameriquest while serving as (bought) Ambassador?
Update of
February 5, 2007: If last week's
media speculation, that Citigroup's in line to buy the damaged
predatory Ameriquest, is true, it will again reveal rifts in the
community and consumer advocacy movements. Citigroup has bought many
friends, from the time of its Associates First Capital Corp. purchase
during which now-CEO Chuck Prince flew around the country telling
groups they could send their complaints to his "personal fax number"
(which some just call a garbage can). Even now, Citi-shills are
singing, "But wouldn't it be better, if Citi ran the show?" Well, no.
Ameriquest is near death, due to predatory lending. Just as HSBC's (14)
billions re-inflated Household to harm more and more consumers, so too
would Citigroup's opportunism reinvigorate the Ameriquest network of
sleaze. That said, in fairness to
some of Citigroup's and even Ameriquest's defenders, it may be that the
companies saw it made sense to help the few consumers that these
advocates referred. But what percentage of Citi's and Ameriquest's
victims have been helped? Very few.
Update of
January 29, 2007: The lawsuit by Wayne A. Lee against Ameriquest
and Roland Arnall sets forth how Arnall and others did not want to
clean up Ameriquest, and that the company is now up for sale. But who
in their right mind would buy it?
Update of
December 18, 2006: Investment bankers, analysts, and others familiar
with predatory lending said last week that Ameriquest's parent ACC has
hired JPMorgan Chase & Co as adviser to sell the company and is
seeking between $1.5bn and $2bn for the franchise...
Update of January 14, 2007: Last week
the Gates Foundation was exposed as investing in Ameriquest / ACC,
while it was being sued for widespread predatory lending. In response,
Gates Foundation Chief Operating Officer
Cheryl Scott told the Seattle Times, "It's very, very complex. Let's
say I don't invest in oil companies but I do go and buy gas with my
car. Let's say I don't buy gas for my car, but I use rubber tires.
Where do you draw the line?" Well, an credible line would
militate against investing in subprime lenders widely charged with
predatory lending. No?
Update of
December 11, 2006: ACC, the imploding parent of Ameriquest and Argent,
last week announced a plan to sell its subprime auto lender Long Beach
Acceptance Corp. for $282.5 million to AmeriCredit. What will they sell
next?
Update of December 4, 2006: Who will
try to buy Ameriquest and Argent? Some now say "the French." Word to
the wise: c'est toxique....
Update of October 16, 2006: From the
mail bag:
Subject: ameriquest question
From: [ ]
To: Ameriquest-Watch [at]
innercitypress.org
Sent: Mon, 9 Oct 2006 2:08 PM
I have a question regarding the upper
level management of Ameriquest and this large penalty they paid. Will
any of them do time in prison? How about civil law suits against them
to take all their assets and give it to the people who were defrauded.
My neighbor is Mary Jo Shelton and I know she was the National VP of
Sales. Will she be doing any time? We have not seen her at this house
here in Eagan for 5 years (they own several properties in MN), now all
of a sudden she’s home every day and volunteering at school. So I did a
little research on the internet and “discovered” her involvement with
Ameriquest. I knew she worked with them, but I didn’t realize her
position, etc. Well she looks great driving around town in her brand
new Land Rover...
Update of October 9, 2006: Echoing AGs
around the country in the midst of gubernatorial campaign, New Mexico
Attorney General Madrid last week issued a press release: "Beginning
immediately, consumers can learn more about the national settlement
with Ameriquest and can sign up to receive a portion of the settlement,
either online or through a toll free number. Consumers who acquired a
loan from Ameriquest in the 1999-2005 time frame are eligible to
receive a portion of the settlement. The amount the individual consumer
receives will be determined by the date of their loan acquisition.
Consumers may call 1-800-420-5875 to hear a recorded message or log
onto
www.AmeriquestMultiStateSettlement.com. The settlement was signed
by the Attorneys General of 49 states and the District of Columbia, and
by banking regulators of 45 states. This is the second largest consumer
settlement of its kind in U.S. history, following the national
Attorneys General landmark settlement in 2002 with Household Finance
International" -- that would be HSBC, regarding which Ms. Madrid and
most other state AGs continue withholding documents, as they do about
Ameriquest...
Update of September 25, 2006:
Subject: Justice
To: MLee [at] innercitypress.org
From: [Name withheld]
Sent: Thu, 21 Sep 2006 1:23 AM
Dear Mr. Lee: I was
previously employed by Argent Mortgage for two and a half years and
managed, among other areas, the corporation's fraud investigation,
borrower complaints and repurchase departments. There are currently
over 568 open fraud investigations involving hundreds of brokers and
hundreds of millions of dollars in fraudulent loans that are being
covered up by top executives in the company. If a broker sustains a
certain monthly volume, Argent management looks the other way and, not
only does not suspend the bad brokers, but knowingly sells these
fraudulent loans on the secondary market to unwitting investors.
I was terminated today and left
with just my purse in tow, but I have names of individuals in the
company who need to be served with subpoenas to enable them to turn
over their spreadsheets and boxes full of documentation and evidence of
all the fraud they have found that is being covered up by Argent
Mortgage's executive management. The state regulators need to know the
truth about the blind eye Argent turns to the fraud perpetrated on
innocent consumers by high volume brokers. They also need to be aware
that Argent knowingly bundles these fraudulent loans and sells them as
mortgage-backed securities on Wall Street, thereby compromising the
SEC, as well as our country's economic stability.
At a recent fraud seminar
attended by hundreds of mortgage lenders in Washington D.C. a week ago,
an attorney who works for Argent's retained law firm, Buchalter Nemer,
stood up and told the seminar attendees that the wholesale lenders in
the audience had better beware, unless their name is Argent. Argent is
safe from investigation because the government got their $325 million
settlement from Ameriquest and won't be looking into Argent, per the
settlement agreement. I hope this isn't true because Argent Mortgage
funded over $50 billion in 2005 and is gearing up to fund well over $80
billion dollars of fraudulent loans in 2007.
Update of September 18, 2006: This
week we'll let Mother Jones magazine's
Sept.- Oct. story about predatory lenders in Cleveland, including
Ameriquest's Argent, speak for itself:
"retired steelworker Steve Zsigrai lives with
vacant foreclosed houses on either side of him. His ex-wife insisted on
moving to the upscale suburb almost 40 years ago. Now, Zsigrai says,
"Shaker lives in la-la land." At a sheriff's sale in December, Deutsche
Bank bought back the modest brick house on his left from Adele Eisner,
a massage therapist. On an annual income of just $26,000, she had
borrowed $197,200 from Argent Mortgage to refinance a high-interest
loan on her new home and pay off other debts. She went into foreclosure
less than eight months later, owing Argent $233,000. The bank had
loaned her nearly three times the county's assessed value of her house.
Argent sells more mortgages than any lender in Cleveland, and it took
just one year to hit No. 1.. In January, responding to complaints that
Ameriquest reps had aggressively pushed customers to refinance over and
over again and misled many of them about the cost of their monthly
payments, 49 states reached a $325 million settlement with the company.
Ameriquest agreed to disclose interest rates and fees up front, use
independent agents at closings, and refinance loans only if a
transaction benefits a borrower. (The Ameriquest settlement doesn't
affect Argent, which was spun off as a separate entity in 2003; both
Ameriquest and Argent are now part of a shared parent company, ACC
Capital Holdings.) After the settlement was announced, Massachusetts
Attorney General Thomas Reilly -- whose opponent in the Democratic
primary for governor is on the board of the loan giant's parent company
-- called Ameriquest "a very bad company engaged in despicable
practices." The man who presided over those practices was by then
already packing his bags. In February, the Senate Foreign Relations
Committee unanimously confirmed Ameriquest's founder, Roland Arnall, as
ambassador to the Netherlands. Arnall and his wife, Dawn, have given
more than $6 million to Republican candidates and organizations since
2000; the Arnalls were honorary finance chairs of the president's
second inauguration....
Update of September 4, 2006:
Ameriquest was hit with a class action lawsuit last week in Baltimore
City Circuit Court. According to the complaint, Ameriquest
instructed its affiliated title settlement companies to charge
borrowers an illegal notary fee, and engaged in a scheme to receive
kickbacks on that fee. The real estate settlement statements
given to borrowers at closing identified a $250 fee payable to
Baltimore-based JM Closing Services Inc. as a notary fee, the suit
alleges. JM Closing was "formed solely to facilitate illegal
payments and kickbacks to Ameriquest" and, in most cases, "did not
actually provide any notary services to Ameriquest mortgage clients who
paid for such services," the complaint says. It just goes on and on...
Update of August 14, 2006: From the
mail bag --
Subject: Ameriquest
Sent: Thu, 10 Aug 2006 3:14 PM
From: [Name withheld in this format]
To: Ameriquest-Watch [at] innercitypress.org
Just found your website on Ameriquest. I guess that explains how they
appraised our house at $72,000, and when we contacted another lender to
refinance, their appraiser gave an estimate of $46,000.
Update of July 3, 2006: The U.S.
District Court, Northern District of Illinois has granted a temporary
injunction, the first tangible result in a multidistrict litigation
brought by consumers against a major mortgage lender for violations of
a variety of federal lending laws. (In re Ameriquest Mortgage Co., No.
05-CV-7097 (N.D. Ill). The size of the MDL will depend on how
many potential class members accept the AGs' settlement offers.
The District Court's initial order in the MDL required the lender to
issue notice to borrowers with Truth in Lending Act claims in the MDL
against Ameriquest. The lender must alert the borrowers that they may
face foreclosure before a decision on pending motions for class
certification and a preliminary injunction is reached. We'll see.
Update of June 26, 2006: From the LA
Times report on ACC's fallen earnings: "In addition to Ameriquest
Mortgage, ACC also includes a larger affiliate, Argent Mortgage Co.,
which provides subprime loans through independent mortgage brokers
rather than its own in-house sales force. Other affiliates are Town
& Country Credit Corp., a small retail lender; Long Beach
Acceptance Corp., a subprime auto lender; and AMC Mortgage Servicing
Inc., a specialist in billing and collecting loans." So why was
Ameriquest's "larger affiliate" left unreformed?
Update of June 19, 2006: Close
observers note that the lawsuits (finally) filed last week show that
Ameriquest disclosed to the state AGs that Ameriquest had no pricing
grid, and thus that all so-called "discount points" paid did not reduce
the interest rate, but were pure predatory profit...
Update of June 12, 2006: From the
Berkshire Eagle (of Pittsfield, Mass.) of June 10, a notice of what was
in all probability a predatory loan: "Deutsche Bank National Trust Co,
Ameriquest Mortgage Securities Inc., AMC Mortgage Services Inc. and
Deutsche Bank National Trust Co. Trust sold property at 19 South
Carolina Ave., Pittsfield." Ameriquest and Deutsche Bank - quite a
combination...
Update of June
5, 2006: It now emerges that ACC Capital Holdings last year paid
$360,070 to board member Deval Patrick, whose staffer says this was for
having attended about four or five board of directors meetings and
acting as ACC's liaison in the settlement discussions with 49 attorneys
general over predatory lending which required "four or five special
briefings" for the board. That's over $36,000 per meeting...
Update of May 29, 2006: From NMN
-- Ameriquest Mortgage, which three weeks
ago closed all of its 229 retail branches, is planning for a
substantial decline in production over the next few months, company
executives told National Mortgage News. The lender anticipates that its
origination volume will fall dramatically for three to six months as it
re-engineers its direct-to-consumer channel toward four regional call
centers in Arizona, California, Connecticut and Illinois...The Orange,
Calif.-based company said its predictions on originations affect only
Ameriquest and not its wholesale affiliate, Argent Mortgage. 'Argent is
unaffected by this,' said Adam Bass, senior executive vice president
and vice chairman of ACC Capital Holdings, the parent of both
units." Convenient, isn't it, that the one channel of ACC that is
covered by the reforms in the AGs settlement now reduces its volume,
with the uncovered and unreformed broker channel doesn't slow down at
all...
From the mailbag, to Inner City Press / Fair Finance Watch from
Gatlinburg, TN ---
... I have Power Of Attorney for my father who
is 68 years old and resides in Gatlinburg, Tn. He and my mother
who at the time was dying of cancer and Ameriquest knew this refinanced
their home in July of 05 because they were convinced by a mortgage
specialist that because they were one month behind on their current
mortgage they were going to lose their home. Ameriquest falsified
income documents and showed rental income where there was none.
My mother passed away in January of this year and now this loan is 4
months behind because my father who's total income even when my mom was
alive was maybe 2000.00 per month cannot make the payment of 1500.00
per month. I have all of the documents from Ameriquest that they
sent to him and am now talking with an attorney because he will have to
file Chapter 13 in order to stop the foreclosure and give me time to
sell his home. [All told,]my parents received 3,500. and Ameriquest
paid some of their smaller bills. Ameriquest made over 15,000 on
this loan....
Update of May 22, 2006: In the
Massachusetts gubernatorial race, in which Ameriquest has become a
major issue, the AG/candidate said, "there is no evidence that this
predatory company has changed."
Update of May 15, 2006: Even before
closings all its retail offices, ACC in 2005 made only 38% of its
subprime loans through the retail channel, which alone is covered by
the AGs' purported reforms. Why let 62% of the business off the hook?
Ask the AGs... Fresh from announcing the closing of its retail offices,
Ameriquest has been identified as the biggest forecloser in Boston,
hauled in to meet with the mayor about the problem...
Update of May 8, 2006: Regarding
Ameriquest's shutdown of its retail offices (thus dodging reforms in
its predatory lending settlement with the state AGs), all we can say is
"we told you so" -- including being the first to report the impending
layoffs, based on emails we received from (ex) employees...
Update of May 2, 2006, 7 p.m. -- From
Bloomberg news, 5:39 p.m. Eastern: "Ameriquest Mortgage Co.'s parent,
ACC Capital Holdings, plans to close all of its 229 retail branches and
eliminate about 3,800 jobs...ACC's regional centers in California,
Arizona, Illinois and Connecticut will finish processing loans approved
by its Ameriquest and Town and Country Credit branches and originate
new mortgages. Corporate functions will be centralized at ACC's
headquarters, the company said in a statement. Spokesman Chris Orlando
declined to provide financial information about the company."
Typical... Reuters at 5:49 p.m. reported that "Ameriquest said the
changes were in compliance with a settlement under which it agreed in
January to pay $325 million to clear up claims that its lending
practices abused customers in 49 U.S. states." In compliance
with the settlement? We'll see.
Update of May 2, 2006, 3 p.m. -- This
just in:
Subject:
http://www.innercitypress.org/ameriquest.htm
From: [Name withheld]
To: AmeriquestWatch [at] innercitypress.org>
Sent: Tue, 2 May 2006 11:39:29 -0700
Your source appears to be correct. Emails have been sent out to all of
my colleagues, managers & supervisors in the appraisal department
of Ameriquest Mortgage that effective immediately all Ameriquest and
Town & Country Credit branches will be shut down.
If true, the reforms in the
settlement with the state attorneys general would be moot, and only the
unreformed Argent would continue. We'll see.
Update of May 2, 2006, 9 a.m. --
overnight Inner City Press received anonymous messages predicting major
layoff announcements at Ameriquest today. Here's a sample email,
predicting a bit more:
Subject: Ameriquest sold?
From: [Name withheld]
To: AmeriquestWatch [at] innercitypress.org
Sent: Tue, 2 May 2006 07:44:19 +0000
My husband used to work for Ameriquest
and he found out tonight (through a reliable source) that Ameriquest
has been sold and as of noon tomorrow their offices will be closed. Of
course most employees have no idea they are about to lose their
jobs...sounds like something they would do.
We'll see...
Update of April 24, 2006: Inner City
Press / Fair Finance Watch has conducted a comparative study of 2005
Home Mortgage Disclosure Act data, this time focused on New York City,
and has found that the largest subprime lender to African Americans in
NYC in 2005 was Ameriquest and its affiliates including Argent, which
made 6394 loans in NYC in 2005, 4656 (or 72.8%) of them over the rate
spread. Ameriquest recently settled charges of predatory lending for
$325 million, while leaving its Argent affiliate entirely unreformed.
Update of
April 17, 2006: Continued sale of loans: in the first quarter
2006 tables, Ameriquest Mortgage came in ninth, after placing
$7.8 billion in ABS (asset backed securities). Among the
securitizers of Argent's loans is JPMorgan Chase...
Update of April
10, 2006: The 2005 Home Mortgage Disclosure Act data, which Inner
City Press / Fair Finance Watch received in late March from Ameriquest,
reveal that in 2005, Argent made 220,069 higher cost loans over
the rate spread, while Ameriquest Mortgage made 122,868 such loans.
(The Federal Reserve has defined higher-cost loans as those loans with
annual percentage rates above the rate spread of three percent over the
yield on Treasury securities of comparable duration on first lien
loans, five percent on subordinate liens.)The reforms announced in
support of the predatory lending settlement with the attorneys general
cover barely 35% of ACC's high-cost lending...
Update of April 3, 2006: With the Attorneys General's focus limited to
Ameriquest Mortgage, Fitch last week put affiliates Argent and Olympus
on Ratings Watch Negative -- specifically, Classes M9, M10 and
M11 of the ARSI series 2004-PW1 Ameriquest Mortgage Securities, on the
grounds of "a deterioration in the relationship between credit
enhancement and expected losses."
Update of March 27, 2006: From the department of
Justice-delayed-is-Justice-denied -- it's been reported that even those
victims of Ameriquest (but not Argent) Mortgage who are entitled to the
attorneys general's restitution wouldn't receive a dime until at
earliest 2007, since "the funds won't be distributed until the entire
amount is collected in quarterly installments over the course of a
year, said Thomas Papageorge, head of consumer protection for the Los
Angeles County district attorney's office." (LA Times, March 22).
Meanwhile Inner City Press' Dutch sources tell of a combative press
conference between new US Ambassador Arnall and Dutch journalists --
"It's not going to end well," this source has predicted...
Update of
March 20, 2006: Update of March 20, 2006: More sample litigation
against Ameriquest, this time from Tennessee, Henderson County to be
exact, where Jimmy and Florence Grice are suing Ameriquest and
appraiser Rick Hyatt for $1.1 million, accusing Ameriquest
of conspiring with Hyatt in October 2003 to inflate the worth of the
Grices' house." He (the appraiser) said our house's price was double
what it was worth," Florence Grice told the Jackson Sun. "It was
properly appraised for $67,500, and it was originally appraised for
$130,000 by Ameriquest."The Grice suit states that Hyatt's inflated
appraisal of their house was predetermined" to allow the Grices to
obtain a refinancing loan of $110,500 at 11.784 percent interest.
"Ameriquest told the Grices that if they made six months of mortgage
payments at $1,064 per month, the company would again rewrite the loan
at an interest rate between 4 and 5 percent, according to the suit.
After making the six months of required payments, Ameriquest did not
reissue the Grices' loan for the lesser percentage rate, which would
have lowered their monthly payments to the "$400 range," the suit said.
Unable to continue paying the $1,064 per month mortgage, Deutsche Bank
National Trust Company, to whom Ameriquest sold the mortgage,
foreclosed on the Grices' home." On that, there are more questions
arising about Ameriquest and Deutsche Bank - watch this space.
Update of
March 13, 2006: The settlement is not a solution, as reflected
for example in this
South Florida news item last week
Update of March 6, 2006: From
the states' Ameriquest settlement, kudos to Inside B&C Lending for
noting this provision about which loans are covered, requiring the
Attorneys General to "renegotiate this provision" after monitor Mike
Moore files 2007 and 2008 reports -- "in these negotiations, the
parties may agree to increase or decrease the margin over Treasury
yield or they may agree to a different standard entirely." This bears
watching… From the Arkansas Democrat-Gazette of Feb. 26, a sample
warranty deed from " Deutsche Bank National
Trust Co., trustee of Ameriquest Mortgage Securities Inc., to Michael
Kirkland and Teresa Kirkland, Lot 6, Villa View Estates, Siloam
Springs, $172,000, signed Feb. 7." Deutsche Bank and Ameriquest…
Update of February 27, 2006: The issue
of ACC Holdings / Ameriquest having doled out Rolling Stones concert
tickets to politicians and other involved in the January 2006 predatory
lending settlement has spread in mainstream media from Nevada to
Massachusetts to Maryland. Meanwhile, confusion about the limited scope
of Ameriquest’s / ACC Holdings’ predatory lending settlement extends to
and/or is caused by those involved in the settlement. In a Feb. 23
conference call, Iowa Attorney General Tom Miller called it a good
settlement, while speaking about a report which described the
settlement as being by ACC Holdings “and its subsidiaries including
Ameriquest” – no mention of the exclusion of ACC’s large Argent
Mortgage unit. While the call included a question-and-answer, this
question was not able to be asked. The eleven who were allowed to ask
questions included trade publications, two reporters who blurred
mortgages into payday lender, and a radio reporter who said she
couldn’t find the report on the website. When asked why more questions
weren’t allowed, the public relations firm listed as the contact said
that “there were two other reporters we couldn’t fit in,” then claimed
that there were 27 who had wanted to ask questions. But since only 11
were allowed, that would leave 16 out in the cold. When asked to
explain, the p.r. flack said haughtily that he wasn’t in charge of the
queue. Who was, then? When asked how to ask Iowa AG Miller a question
(about the exclusion of Ameriquest), the p.r. flack said AG Miller has
his own press people. Quite an operation…
Update of February 20, 2006:
Flowing from a flim-flam partial settlement, Ameriquest founder Roland
Arnall’s nomination to be U.S. ambassador to the Netherlands went
through without even any additional debate. From California, Arnall’s
nephew and ACC vice president Adam Bass said, "We are pleased that Mr. Arnall's nomination to
be the ambassador to the Netherlands has been confirmed by the United
States Senate. We take great pride in knowing that our company's
founder will be representing our country abroad and know he will serve
with honor and distinction." What country does Household
International’s ex-CEO Aldinger want?
Consider how little of ACC Capital Holdings' business in Cleveland is
covered / reformed by the AGs' settlement – the 2004 Cleveland volumes
of loans to African Americans (Argent 2270 versus only 56 by Ameriquest
Mortgage) and Latinos (Argent 176 versus only 16 by Ameriquest
Mortgage). In Cleveland in 2004, Ameriquest Mortgage made only 54
refinance loans to African Americans, while Argent made 1015 refinance
loans to African Americans. As we’re noted for other areas, most
recently Connecticut, the settlement’s exclusion of Argent is even more
problematic as a fair lending matter...
Updated
February 13, 2006: Looking more closely into what the attorneys
general’s settlement excluded, Inner City Press/Fair Finance Watch has
examined the sample state of Connecticut. Ameriquest had its license
suspended in the state for a time; Connecticut’s attorney general
appeared on ABC Nightline the day of the settlement, talking
tough. Well, in Connecticut in 2004, Argent was a larger
lender to both African Americans and Latinos than was Ameriquest.
Ameriquest made 286 loans to African
Americans, 168 of them over the rate spread.
Argent made 485 loans to African
Americans, 286 of them over the rate spread.
Ameriquest made 242 loans to Latinos,
133 of them over the rate spread.
Argent made 631 loans to Latinos, 334
of them over the rate spread.
The government’s numbers
reflect that ACC Capital Holdings’ largest lender to people of color in
Connecticut was left uncovered and unreformed by the settlement.
Meanwhile, more on the Argent layoffs: ACC refused to confirm to
journalists the locations of the cuts, but it’s known that many are in
White Plains, where ACC had been growing like gangbusters (or a boiler
room operation). ACC bought in the driver Danica Patrick, to
quasi-bless (or cover for) the operation. And now the cut-backs. And
what’s Danica Patrick’s view? We’ll see.
Update of
February 6, 2006: In the run-up to Super Bowl XL in Detroit, Inner City
Press / Fair Finance Watch has analyzed mortgage lending patterns in
the Detroit Metropolitan Statistical Area in the most recent year for
which data is available, 2004. Ameriquest Mortgage in 2004 made 381
loans to African Americans in the Detroit MSA, 315 of them over the
rate spread. Meanwhile, Ameriquest’s affiliate Argent Mortgage, which
the state attorneys general left out of the settlement and reforms,
made 2673 loans to African Americans in the Detroit MSA in 2004, 2142
of them over the rate spread. So the settlement covers less than 12.5%
of ACC Capital Holdings’ loans to African Americans, and an even
smaller percentage of ACC’s higher cost loans over the rate spread.
In
other media, from Utah’s Deseret Morning News of Feb. 2:
“All Marian Paul wanted was a $4,000 loan.
Instead, the 73-year-old Native American widow ended up with a
$60,000 high-interest-rate loan from Ameriquest Mortgage Co.,
according to a lawsuit filed Tuesday in U.S. District Court. Now, with
the loan in default, Paul faces the threat of losing her Salt Lake City
home to foreclosure. The complaint alleges that after Paul contacted
California-based Ameriquest, two representatives of the company
showed up at Paul's home unannounced on the evening of March 24, 2005,
at 10:30 p.m. With only a bathroom light working in the house, the
Ameriquest agents moved a table into the hallway by the bathroom and
requested that Paul sign loan documents, promising her that she would
save a lot of money, the suit says. Paul, who has cataracts and does
not read English well, asked if she could keep the documents so her
daughter could read them to her. But the sales agents said no…”
Another indication of how much the attorneys general missed is
reflected in Indian Country Today’s January 31 article about the
settlement:
“Ameriquest
was a top 20 lender to American Indians in 2004, and Argent (not named
in the investigation) ranks fifth. Together they would comprise the
third-largest mortgage lender to Indians in the country, and their 2004
cumulative total was more than $1 billion. Ameriquest, a retail
lender with physical branch offices, loaned $348 million to American
Indians in 2004, its HMDA filing shows. That was the 17th largest in
the country. Argent, a 'wholesale' lender that does business with local
mortgage brokers, loaned $800 million… These were huge increases from the firms' 2003
Indian mortgage lending, a record year overall for mortgage lending in
the country. That year, Argent reported making $94 million in loans to
Indians, for 20th place, and Ameriquest $62 million, placing it 31st,
according to HMDA data.”
So
Argent impacted more consumers than its affiliate Ameriquest Mortgage
in 2003, as well… The Seattle Times of January 30 quoted “David Huey,
the [Washington State] assistant attorney general who negotiated the
Ameriquest agreement [that] it's better to settle and make sure the
company pays some damages than to fight a long and expensive court
battle and risk Ameriquest paying nothing.” Mr. Huey said the same
thing about leaving Decision One out of the December 2002
Household/HSBC settlement, which ignored the leverage provided by the
then-pending HSBC-Household acquisition, just at the AGs here have
pretended that Roland Arnall’s tied-up nomination to be ambassador to
the Netherlands didn’t provide leverage. Why did they agree to a
“release” clause that they admit won’t be understood. Again, from the
Seattle Times: Huey called the release ‘a disaster in terms of
understanding. I was the guy that was pushing for plain English and
understandable terms,’ he said. ‘I certainly wasn't personally pleased
with the wording of the release.’” Then why sign off on it?
And
last week Inner City Press got yet another form letter from the
Washington State Attorney General’s Office: “Thank you for your
continued patience regarding your public records request received on
May 2, 2005… we anticipate needing another 20 business days to complete
your request.” The request is for documents about Ameriquest and
Argent, and they’ve been sending the same form letter since June…
Update of
January 30, 2006, 8 p.m. -- 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 [Editor's
note: see below for 2/1/06 update] 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 15% of the
employees at Argent, ACC can claim to have even less control over
Argent’s high-cost subprime mortgages...
[Editor's
Update 1: late on the afternoon of Jan. 31, ACC's spokesman confirmed
by email the Argent layoffs, reported 24 hours earlier by Inner City
Press. He wrote that "this consolidation increases our efficiency."]
[Editor's
Update 2: on February 1, ACC emphasized to Inner City Press that
while the 15% layoff figure is correct, the individual who first wrote
in to us with the employee number over 1,000 was wrong, that the number
is 600. Duly noted -- along with ACC's argument that that Argent does
not, even cannot, control the mortgages it makes, much less now with
600 fewer employees.]
In other media:: In an interim snapshot of the chaos, the
Boston Globe last week quoted the Massachusetts attorney general that
ACC Capital Holdings “is a very bad company engaged in despicable
practices” – entirely true. But since other attorneys general
have an agenda to declare the company (or parts of it) ready for
business by consumers, the California AG’s spokesman was quoted by the
AB, “We believe that the reforms mandated by this settlement should
increase the comfort level of consumers who are considering getting a
loan from the company." But what about Argent? Developing…
Update of
Jan. 24 – Parts of the largest subprime mortgage lending conglomerate
in the United States, ACC Capital Holdings Corporation, yesterday
announced a $325 million predatory lending settlement with the
attorneys general and regulators in 49 states. While many states’
attorneys general heaped praise on the settling company, there are
reasons for consumers to be unsettled, critics say.
Chief among these reasons is the exclusion of
ACC’s largest subprime unit, Argent Mortgage, from any of the reforms
in the settlement, despite the fact that Argent makes more of ACC’s
high-cost loans than its affiliates Ameriquest, Town & Country or
Bedford/AMC. As in the attorneys general’s larger 2002 settlement with
HSBC’s Household International unit, the distinction seems to be
between retail loans and those made through mortgage brokers. But
with so many of the abuses in the subprime lending industry being in
the broker channel, settlements which leave unaddressed these problems
can hardly be said to reform and improve the industry.
Even this limited settlement raises questions
about the due diligence performed by the investment banks which have
helped package Ameriquest’s loans and sell them as mortgage-backed
securities, including the three largest banks in the United States:
Citigroup, JP Morgan Chase and Bank of America. Each of these three
banks has securitized Ameriquest loans, while claiming to screen out
predatory loans. With today’s settlements, these banks previous
defenses of their practices must be inquired into, critics say.
But who will do the inquiring? Today’s business
press largely missed or ignored the loopholes in the settlement.
ACC Capital Holdings or “Ameriquest” was widely described as the
largest subprime lender in the United States, without mentioning that
what makes it the largest is Argent Mortgage, which is not covered by
the terms of the settlement. The Los Angeles Times reported that
“advocacy and community groups… praised the conditions imposed on
Ameriquest” – without mentioning Argent.
The LA Times also predicts smooth sailing for
the nomination of ACC’s founder Roland Arnall to become U.S. ambassador
to the Netherlands: "Sen. Sarbanes
has indicated that if Mr. Arnall would settle this matter with the
attorneys general, he would not object to or seek to block moving
forward on this nomination," Jesse Jacobs, a spokesman for Sarbanes,
said… "Because a settlement was reached, Sen. Obama will not seek to
block Mr. Arnall's nomination," said Tommy Vietor, a spokesman for Sen.
Barack Obama. But not only does the settlement not cover or
reform ACC’s largest subprime unit, Argent – the settlement is also not
final, until it is reviewed by a court. Ironically, some of the
same members of Congress who are questioning the bypassing of courts
and over-concentration of power in the executive branch are in this
case conveniently ignoring judicial oversight of this tentative
settlement. As noted, Arnall is a billionaire who makes both federal
and state political campaign contributions, funded at least in part by
ACC’s high-cost loans. So what does
$325 million buy? Beyond a coveted ambassadorship, carte blanche to
keep gouging consumers, at least through Argent Mortgage.
Update of
January 23-24, 2006: Earlier today,
the largest subprime mortgage lending conglomerate in the United
States, ACC Capital Holdings Corporation, announced a $325 million
predatory lending settlement with the attorneys general of more than 40
states. Almost immediately, questions were raised as to why the
settlement does not cover ACC’s subsidiary which made the most
high-cost loans in 2004, Argent Mortgage.
The settlement comes at a convenient time for ACC and its founder,
Roland Arnall. In two weeks, the company plans a major multi-million
dollar advertising campaign connected to the National Football League’s
Super Bowl XV in Detroit. Arnall has been nominated to become the
United States ambassador to the Netherlands. He has seen his
confirmation stalled for months due to the pending settlement. But
given the perceived loopholes in the settlement, critics question
whether Arnall’s nomination should be forward in the U.S. Senate.
In 2004, the most recent year for which Home Mortgage Disclosure Act
data is available, ACC’s Ameriquest Mortgage made 185,833 loans, while
its Argent Mortgage unit made 215,403 loans, more than half of them
over the federal regulators’ high cost definition, of three percent
over comparable Treasury securities on a first lien, and over five
percent on a subordinate lien. Studies of the
data have shown that ACC and Argent direct a much higher percent of
their high cost loans to African Americans and Latinos than is true of
other, prime-priced lenders.
Inner City Press in mid-2005 submitted Freedom of Information Act
requests to many states’ attorneys general, for copies of consumer
complaints against ACC and Argent. ACC’s legal department opposed the
release of any information, resulting in ongoing litigation, including
in Texas.
ACC and its predecessors have previously purported to reform their
practices, as far back as 1996 with the Department of Justice and
Office of Thrift Supervision (when the company was named Long Beach
Mortgage), in 2000 with the Federal Trade Commission, and since. Among
those questioning the settlement are class action lawyers, by means of
a press release. Consumer protection advocates, however, emphasize the
need for binding reforms at ACC including Argent, and not only monetary
settlement for past loans. This is a developing story.
Update of
January 23, 2006, 8:30 a.m. EST: Both the
Los Angeles Times and
Washington Post have reported that now comes the Ameriquest
settlement, the LA Times
reporting that it covers Ameriquest Mortgage, Town & Country
and the ex-Bedford, AMC (ACC's smallest unit) – that is, that it does
not cover Argent, which is ACC’s largest subprime lending unit (see
below). While awaiting
confirmation of that huge loophole, the fact that ACC is a serial
settler, having previously committed to reform and then still abusing
consumers, gives reason to be dubious about the whether ACC (including
but not only Argent) will not simply continue to gouge and defraud
consumers in the future. Developing… For or with more
information, contact
us.
From the 2004 Home Mortgage Disclosure
Act data:
2004 loans
by Ameriquest = 185,833
2004 loans
by Argent = 215,403
2004 loans by Town &
Country Credit Corp. =
10,462
Update of
January 17, 2006: Lobbying disclosure forms filed January 10 in
Utah reveal Ameriquest giving Rolling Stones concert tickets valued
(with a dinner) at $200 to nine legislators -- and Utah Attorney
General Mark Shurtleff. Since Ameriquest is on record as negotiating a
predatory lending settlement with the state attorneys general, might
this not be a conflict? Developing…
Update of January 9, 2006:
As Ameriquest tries to finalize a too-narrow settlement with state
attorneys general, a sample from this week’s mailbag:
Subject: Ameriquest refinancing
Sent: Thu, 05 Jan 2006 14:54:30 -0500
From: [Name withheld]
To: Ameriquest-Watch [at] innercitypress.org
I refinanced my home in 2004 approximately
October with Ameriquest Mortgage through their local office. At
the time my job hours had been cut in half and I needed to refi to
consolidate debts and needed cash out to hold me until my situation
changed.
My loan officer was Kathleen Lewis and she
approved me over the phone, within 10 minutes actually, did an on-line
appraisal on my property and said she could close in 10 days. I
was thrilled. The only thing about the loan that was not perfect
was that I was told I would be on a fixed interest loan for two years
and then it would become variable. Kathleen said in two years
come back to them and they would put me on a fixed 30 yr loan. In
the meantime, I was to clear an erroneous item on my credit report in
the amount of $3500. This was my mother's nursing home bill by
Ensign. After a year of trying to deal with them I decided to forgo
that for the moment and get my home refi-ed while the interest rates
were even lower.
While looking for lenders I was told by one of
the loan officers when she heard my loan was with Ameriquest that they
had class action lawsuits going on. I checked to see the reason
for the suits and found that everything that happened to these other
Ameriquest customers happened to me.
I was told two year fixed changing to variable for the balance of the
mortgage, that when I came back to them in two years they would refi AT
NO ADDITIONAL CHARGE FOR CLOSING COSTS and get me on a 30 yr
fixed. I was told my existing loan would be at 5.6% and when I
went to sign papers it was 5.9%. I was told there was no
pre-payoff penalty and there was to the tune of $4120. I found
out later that the loan was for 3 yr fixed not two years, my closing
costs were astronomical, around $11,000 or more. For instance the
notary charge was $250.00.
To top it off, I called them about redoing the
loan and they flat out said they don't do my type of loan anymore
(manufactured home on my property) and were very rude and at that time
they told me there was a penalty for early payoff. I couldn't
believe it. I do feel they lied and pushed me through the loan process…
Update of
January 3, 2006: Inquiries into pending class actions against
Ameriquest have resulted in, for example, one pending in Minnesota
concerning notary fees, reportedly Twite v. Ameriquest Mortgage
Company, case number CV 05-2210 PAM/RLE.
Update of December 26, 2005:
From this week’s mailbag:
Subject: Ameriquest
Date: 12/23/2005 1:36:14 PM Eastern Standard Time
From: [Name withheld]
To: Ameriquest-Watch [at] innercitypress.org
I am a former employee of Ameriquest and I can
confirm all the things that were in your article. I have seen it
all. Loan officers are sometimes pushed so hard to meet a quota
that they will manipulate borrowers into doing loans that have no real
benefit to them…. Ameriquest states to be the sponsor of the American
Dream and it constantly preaches do the right thing. In the
every day life of an Ameriquest employee, the only dream is
Ameriquest's and doing the right thing isn't always being done.
We were pushed to work 12 hour days, never leave the office for lunch,
and work on Saturdays. Month ends were all about working until
midnight just to get an approval for a loan that would be back dated
and closed the next day(just so it would count for the current month).
Now, that I am on the outside I finally see on the bad things that were
being done in our office. Title companies removing multiple liens
just to close loans. Appraisers pushing the value on properties
just to get a loan done.
Update of December 19, 2005: Compared
to the number of consumers it’s ripped off, Ameriquest’s
repeatedly-reported proposed settlement of $295 million is woefully
inadequate. So to the proposed reforms (which would leave in place
Ameriquest’s misleading advertising, that lures those seeking the
American Dream into a morass-like nightmare). So why would the
attorneys general sign off on it? We’ll see. From the mailbag:
Subject: Ameriquest
Date: 12/14/2005 11:52:57 PM Eastern Standard Time
From:[Name withheld]
To: Ameriquest-Watch [at] innercitypress.org
...Your website and its contents have been my link to
sanity during an 18 month ordeal with Ameriquest. I have been
dealing with their customer resolution specialist... for 6 months after
threatening to file a lawsuit and cc same to press, they acknowledged
they wrote a loan of no benefit to me, offer a rewrite but refuse to
refund me the excess interest, foreclosure fee, closing costs of bad
loan, etc (funny how it is a TILA violation to refi a mortgage
without a benefit to the borrower but they ADMIT NO WRONGDOING and DENY
LIABILITY). get this- they admit they do not have my signature on final
loan docs! I have some interesting findings to share- my
foreclosure was actually with Ameriquest and Deutsche Bank..
I am appalled that a tentative settlement is being reached with 33
states and want to know where the indictments are.
Our thoughts exactly.
We'd like to hear more from this correspondent.
Update of December 12, 2005:
Ameriquest’s Arnall’s defenders now include New Mexico governor (and
presidential hopeful) Bill Richardson… And from the mailbag:
Subject: ameriquest info
Date:
12/8/2005 2:15:12 PM Eastern Standard Time
From: [Name
withheld] To: Ameriquest-Watch [at] innercitypress.org
I am
currently wanting to put in an offer for a house that is listed with
Ameriquest mortgage securities inc as the owner. It was owned by
an individual woman for about 20 years and then last fall, Ameriquest
is shown as the owner right after another buyer was listed and at the
same time, her three years back taxes were paid. My guess would
be that they either foreclosed on her or her house was sold to an
individual at a real estate tax sale for being delinquent. All
that aside, I am very interested in the house, but it is of course
listed as is with Ameriquest and I am concerned based on their
reputation about doing any business with them.
Update of December
5, 2005: Another jury has found Ameriquest to be predatory, this
time in Oklahoma. From the Tulsa World of December 1:
“Melba
‘Mark’ Gillean shouldn't have responded to a letter she received in the
mail five years ago, she said Wednesday. She didn't know it then, but
her response to the advertisement for loan rates from Ameriquest
Mortgage Co. would lead to foreclosure attempts against her and bad
credit reports that weren't warranted. Gillean's vindication came this
month, when a Tulsa County jury awarded her nearly $5 million in
damages…The jury's decision included a verdict of $3 million in
punitive damages against Ameriquest.”
What’s the
response, from Ameriquest’s defenders? We’ll see.
Update of November 28, 2005: The Baltimore Sun last week
editorialized in favor of blocking Arnall’s nomination to become
U.S. ambassador to the Netherlands. In Los Angeles, the new
mayor has had to return illegal contributions from Ameriquest (alright,
it was a “gift basket”). The LA Times last week correctly noted that As head of the Justice Department's civil rights
division, Deval L. Patrick brought a case against Roland E. Arnall's
mortgage lending company for allegedly piling extra charges onto home
loans for minorities, women and the elderly… But in a twist, Patrick…
recently wrote the Senate Foreign Relations Committee on Arnall's
behalf. ‘He really stepped forward,’ Patrick… said of Arnall's
willingness to address the charges raised against Long Beach Mortgage
Co., which evolved into Ameriquest. "He used the experience to make a
better company." That’s funny – after settling in 1996
and supposedly “us[ing] the experience to make a better company,”
Ameriquest in 2005 is under investigation by thirty-some states for
more predatory lending…
Update of November 21, 2005: The following arrived in Inner City Press’
email box on Thursday, November 17:
Subj:
Ameriquest Layoffs?
Date:
11/17/2005 5:04:22 PM Eastern Standard Time
From: [ ]
To:
AmeriquestWatch [at] innercitypress.org
FYI - I was just at the corporate headquarters
for Ameriquest mortgage on Town & Country Road in Orange, Ca. They have security guards posted on all the
floors, I ask and was told that they were having massive layoffs in
this building and several others throughout Orange County...
The next
day’s L.A. Times reported: “The corporate parent of Orange-based
Ameriquest Mortgage Co. said Thursday that it would lay off 10% of its
nationwide workforce -- about 1,500 employees -- as the long-running
housing boom and demand for home loans cooled off. ‘The mortgage
industry is entering a more challenging phase of rising interest
rates,’ ACC Capital Holdings Corp. said in a statement. ‘In cyclical
industries such as mortgage lending, periodic workforce reductions are
not uncommon’... After benefiting for years from a booming housing
market, mortgage lenders face an industrywide slowdown as a rise in
interest rates has damped demand for refinancings and new loans. The
Mortgage Bankers Assn. on Wednesday said its market composite index, a
measure of mortgage loan application volume, slipped last week to
657.6. It is down 13.7% from a year ago.”
Question (not asked in the LA Times’ story) -- might
not these layoffs have something to do with Ameriquest’s predatory
lending troubles?
Update of November 14, 2005: While scandals swirls about the use of
Ameriquest’s corporate jet, and Arnall tries to sneak through Senate
confirmation on party lines (with tricks), Ameriquest’s
ex-consultant(s) and current Board member(s) might want to consider
this sample finding: At Ameriquest Mortgage Company, for conventional
first lien loans, a higher percentage of upper income
African American borrowers were saddled with high cost rate spread
loans than was the case for moderate income whites.
Still want to confirm, or to fly that jet?
Update of November 7, 2005: Even in
the face of Freedom of Information Act requests by Inner City Press,
and inquiries by the Federal Reserve, Bank of America still blacks-out
its answers to the Fed about the terms of its dealings with Ameriquest
Mortgage Corporation, which include “whole loan trading”... On the
(continuing) ICP data analysis front:
Ameriquest's
2004 loans in the Nashville MSA: 1942
Ameriquest's loans at or over the rate spread: 1242
% of Ameriquest's loans at or over rate spread: 64%
Across the aisle: on November 1, Sen. Chuck Hagel
(R-Neb.) cited concerns about ongoing state investigations into
Ameriquest. Hagel's switch tied the Foreign Relations Committee vote,
9-9. But then Chairman Dick Lugar (R-Ind.) threw out nine proxy votes
from Senators not in attendance. Counting only the votes of those
committee members who were physically present at the hearing, the
nomination was approved, 8-2. Developing...
Update of October 31, 2005: A vote confirming ambassadors last week did
not, as it turned out, include Ameriquest’s Roland Arnall. His written
submissions to the Senate have stated, of the investigations by thirty
or more state attorneys general: "The precise timetable is difficult to
predict, but we anticipate a final resolution by the end of this year.”
We repeat: the mere payment of a fine is not resolution. There’s a need
for binding (and monitored) injunctive relief...
Update of October 24, 2005: As reported by the LA Times, at last week’s
hearing on the nomination of Roland Arnall
to be the United States ambassador to the Netherlands, “Arnall
attributed the delays in concluding the settlement to the difficulties
of dealing with so many regulators and to the many details involved.
But he said ‘the most important aspect’ had been resolved with
Ameriquest's decision to set aside $325 million.” We
disagree -- the most important aspect would be binding injunctive
relief, to cease and desist from what have been Ameriquest’s practices
(interestingly described here.)
Also, reported in last week’s Cleveland Scene: “The FBI began
investigating predatory-lending cases involving Argent, according to
Dennis Ginty of the Ohio Department of Commerce.” Will this put Arnall
on ice?
Update of October 17, 2005: Asked last week about the Georgia Department
of Banking and Finance cease-and-desist order against Ameriquest’s
Argent unit, Adam Bass, the senior executive vice president of ACC
Capital (and the big boss’ in-law), tried a Household-like positive
spin: "This is a broad, industrywide issue, and we are happy to be at
the forefront of continuously working to eradicate the problem." Then,
when asked “whether Argent would apply any of the practices listed in
the Georgia order in other states where it does business, he said, ‘We
will evaluate as we go forward.’” That’s being “happy to be at the
forefront”? Not even applying the anti-fraud practices consented to in
Georgia to other states?
Update of October 10, 2005: At a
recent industry conference, Ameriquest’s new vice president for
regulatory affairs Rodrigo Alba bragged that the Federal Reserve's
findings that only 2% of the 8,853 HMDA reporting lenders need further
scrutiny will go a long way toward blunting criticism that the industry
is biased towards minorities. "I honestly believe that the language in
the report will serve to neutralize the heated rhetoric," Alba
predicted. "It has already caused consumer groups to back off," he said. Or is that, sell out? This bragging is
unseemly from a company under investigation in 30 states for predatory
lending.
Update of October 3, 2005: Yet another
settlement, this time with the Georgia Department of Banking and
Finance, whose spokesman has said that Ameriquest's broker unit Argent
"was doing business with unlicensed individuals. Regarding Ameriquest
itself, consider this complaint, sent to Inner City Press by the
Washington State AG's Office: "I refinance my home with Ameriquest...
We noticed that we were charged $914 for title insurance." And then it
turned out that Ameriquest did not pay off old creditors as it had
promised -- making the consumer even more "subprime" than before...
Update of September 26, 2005: We’ve
looked closer at Ameriquest’s 2004 lending record, this time in the
Nashville MSA, considering which loans are subject to a rate spread (3%
higher than comparable Treasuries on a first lien, and 5% on a
subordinated lien) --
Whites: 1417 originations, 872 over
the rate spread (61.54% of loans
over the rate spread)
African Americans: 329 originations, 253 (76.9%) over the rate
spread
-- 1.25 times higher than for whites
American Indians / Native Alaskans: Nine origination, seven (77.78%)
over rate spread -- 1.26 times higher than for whites...
Update of September 19, 2005: Now here’s
a scam: Roland Arnall says he will resign as chairman of Ameriquest and
cede his wife control of his companies if by some new madness he is
confirmed as ambassador to the Netherlands. First of all, Ameriquest’s
predatory record under Arnall should disqualify him from representing
the U.S.. Second, handing management to your wife is hardly a blind
trust. In this case, maybe Arnall should
give control to his ex-wife... [ICP note: pardon the
Page Six tone of our Ameriquest Report this week.]
Update of September 12, 2005: From the
Ameriquest files, another complaint (naming names) -- “I responded to a
pop-up ad on the Internet. John Van Der Graf then called and we
discussed a cash-out refinance to reduce our debt. Mr. Van Der Graf
suggested a 9.25% adjustable rate mortgage. Our current mortgage was at
7.5% so we hesitated to do this. The supervisor, Terrell Richard I
believe, got on and we talked. He assured me that if we refinanced the
home with this loan, we could, in 12 months, refinance back to the
mid-5’s if we were not late on any payments... We did refinance, paying
numerous fees (loan discount fee $3450.49; appraisal fee $350;
tax-related service fee $70, flood search fee $16, lender’s processing
fee $629, Admin to Ameriquest Mortgage $239, application fee $360) and
when we called back to refinance [a year later], Ameriquest told me
neither employee remained with their company and they did not know of
any program where we could do what their employee had said. Leaving me
stuck with a 9.35% ARM that is 4% points over the current market.”
That’s
how they do it... For further information, click here to contact us
Update of September 5, 2005: In
Louisiana in 2004, 72.6% of Ameriquest's mortgages were over the
Federal high-cost rate spread (3% over Treasury securities on a first
lien, 5% on subordinate liens). In Alabama in 2004, 74.17% of
Ameriquest's mortgages were over the rate spread. And, highest of the
high, in Mississippi in 2004, 78% of Ameriquest's mortgages were over
the rate spread. And now? Click here for ICP’s
Gulf
Coast Watch.
Update of August 29, 2005: The
predators’ profits, per the LA Times: “ACC Capital Holdings Corp., the
holding company for Ameriquest Mortgage and other operating companies,
recorded a pretax profit of $1.38 billion last year on $4.13 billion in
revenue, according to financial statements obtained by The Times.”
Update of August 22, 2005: Last week it was reported that Ameriquest plans
to offer $1.5 billion in asset-backed securities supported by high-cost
home equity loans... And then, through another vehicle called Park
Place, it will issue yet more securities, $1.13 billion worth, through Bank of America and
RBS
Greenwich Capital, among others. Meanwhile Ameriquest, while
setting aside over $300 million to settle predatory lending charges
including in New York, has just signed a lease for 3,500 square
feet at 444 Merrick Road in Lynbrook on Long Island. More predatory
lending?
Update of August 15, 2005: After months of Ameriquest-caused delay, Inner
City Press / Fair Finance Watch has received a four-page ruling from
the Texas AG’s Open Records Division, stating among other things that
“the OAG
states that the Consumer Protection and Public Health Division is
currently investigating Ameriquest... for potential violations of the
Texas Deceptive Practices - Consumer Protection Act... Generally,
however, once information has been obtained by all parties to the
litigation through discovery or otherwise, not section 552.103(a)
interest exists with respect to that information. Thus, information
that has either been obtained from or provided to the opposing parties
in the anticipated litigation is not excepted from disclosure under
section 552.103(a) and it must be disclosed.”
We’ll see... From the
N.Y. Post’s intrepid Fredric U. Dicker: “Gov. Pataki has taken a
$25,000 contribution from a powerful California company hoping to end a
New York investigation of its alleged ‘predatory’ lending practices.
[New York’s] and other attorneys general... had initially pushed for a
$500 million penalty against the company. While not directly involved
in the talks, the Pataki-controlled Banking Department weighed in on
Ameriquest’s side by supporting a lower settlement figure, said a
source close to the case.”
Update of August 8, 2005: in the L.A.
Times of August 7 we're told that "in 1997, Arnall sold the part of
Long Beach Savings that worked through outside brokers. He kept the
part that made loans directly to consumers and renamed it Ameriquest.
Now, Ameriquest Capital and its subsidiaries employ more than 15,000
people at about 300 U.S. offices, generating $82.7 billion in loans
last year... Arnall has kept the company private, employing family
members in key posts. Brother Claude E. Arnall, 60, formerly headed a
unit. His second wife, the former Dawn Mansfield, 47, whose background
is in commercial real-estate management, has been Ameriquest's co-chair
since about the time of their marriage in 2000. Nephew Adam J. Bass,
39, is the company's vice chairman." Note that Long Beach's wholesale
operation was told to Washington Mutual (where WaMu now claims
that it must be analyzed separately, not combined with WaMu's other
units). And that Adam Bass is Arnall's nephew? Who knew... The LA
Times continues: "If the Senate confirms Arnall as ambassador to the
Netherlands, he would be required to resign as chairman of Ameriquest,
though he would remain the principal owner." A predator as diplomat?
We'll see...
Update of August 1, 2005:
While Ameriquest seeks to settle on the cheap with
state attorneys general, Inner City Press received last week additional
complaints against Ameriquest, including by consumers who had
purportedly been made whole by Ameriquest. The
consumer wrote to Ameriquest’s Lori A. Maimone on Town & Country
Road: “Please note that I am totally dissatisfied with the
settlement...I really had no choice but to accept your offer as my
attorney wanted most of the loan proceeds as retainer to pursue this...
We will be looking to refinance as soon as possible again as we do not
want to do business with Ameriquest for any length of time. Had I known
this would turn into such a mess, I would have pursued any of several
other offers I had received.”
Ameriquest responds with respect to this “purported
dissatisfaction with the settlement, Ameriquest has no comment.” Proud sponsor of the American Dream -- oh we
forgot, that's copyrighted...
Update of July 28-29, 2005: On the
afternoon of July 28, Ameriquest disclosed that it is setting aside
$325 million, saying this is “is based on extensive discussions with
the states and represents the company's best estimate of its maximum
financial liability for a comprehensive resolution of this matter."
The immediate question was: why did Ameriquest jump
the gun and announce a settlement before the AGs did?
A cynic inferred that Ameriquest was still
negotiating, making this figure public to put pressure on (some) AGs to
accept it. But from Des Moines, the Iowa
Attorney General issued this statement: "We understand that Ameriquest
has announced that related to our discussions it has recorded a
provision of $325 million in its financial statements. The states do
not disagree with Ameriquest's actions in this regard."
Ameriquest claims it was required to make the
disclosure, even though it is not a publicly-traded company, in
connection with a bond prospectus. Perhaps. Another cynic noted that on
the same afternoon, the White House formally
nominated Ameriquest’s owner to become
U.S. ambassador to The Netherlands. Low lands indeed... Meanwhile,
also on this same afternoon, the Texas Attorney General’s Office’s
letter extending its time to rule on the Freedom of Information /
Public Information Act request for the 41 boxes of documents about
Ameriquest being withheld by that office was received by the requested,
Inner City Press. (No cynics here -- just stoics).
The more substantive question is how meaningful the
reforms / consent decree might be, and how they would be enforced. Also, it’s worth nothing that while this
figure is below the $484 million paid by Household International,
Ameriquest’s volume of subprime mortgage loans is higher (highest, in
2004). There are doubts and questions
about this settlement, that will be answered and/or addressed (even,
attacked) once despite this lurching process it become public.
Developing...
Update of July 25, 2005: From among
the complaints against Ameriquest that Inner City Press has received,
this statement by Ameriquest itself: “Ameriquest is affiliated with the
originating lender, Town and Country Credit Corporation. Ameriquest
also serviced the loan from origination to August 23, 2002, when the
loan was sold, servicing request, to Washington Mutual. Accordingly,
Ameriquest filed the response regarding the origination issued on
behalf of our affiliate and the investor.” So
Washington Mutual buy (“invests in”) Ameriquest loans... The above is
in connection with a loan where the borrower says that TCCC/Ameriquest
over-recorded the borrower’s income, a pervasive complaint against
Ameriquest. Developing...
Update of July 18, 2005:
Ameriquest last week settled for $8 million the
Connecticut Banking Department charges that it violated its previous
anti-flipping “commitment.” This does not
resolve the ongoing state attorneys general investigation. On that,
Inner City Press last week received a copy of Ameriquest’s second brief
against the release of documents that ICP has requested from the Texas
AG’s Office. The Ameriquest brief is
crudely smeared with magic marker. Ameriquest makes a claim for
exemption “in conjunction with constitutional and common law rights of
privacy.” A sentence begins, “Additionally, it includes” -- followed by
magic marker. This “brief” is by Ameriquest Senior Counsel Diane E. Tiberend, who
appeared with Tom Noto and John P. Grazer in a Louisiana incorporation
filing in 2002, for Ameriquest Newco, Inc., and in this letter
in which the Connecticut Department of Banking stated that it was
“unable to find that the financial responsibility, character,
reputation, integrity and general fitness of [Ameriquest] and of its
officers, directors and principal employees are such as to warrant
belief that the Applicant's business will be operated soundly and
efficiently, in the public interest.” Not in the public interest --
that’s Ameriquest...
At
deadline, ICP received yet another letter from Ameriquest, this one
adding that “evidence of conduct or statements made in compromise
negotiations is likewise not admissible.” But this is not about the
admissibility in court of evidence -- it is about whether the records
came be withheld under Texas’s Public Information Act. We say no...
Update of July 11, 2005: From the
Texas AG’s office comes another letter -- without the referenced
attachments -- dated June 29, 2005:
“On
May 16, 2005, the OAG [Office of the Attorney General] filed a request
for a ruling with the Open Records Division. On May 19, 2005, the OAG
submitted supporting material, along with a copy of many of the
documents at issue. Additional documents were submitted for your review
on June 8, 2005. Since that date, the OAG has located additional
documents to which Ameriquest may file objections to disclosure. Those
documents are submitted for your review as Exhibit H.”
This exhibit, of course, has not been provided to
Inner City Press, since “Ameriquest may file objections to disclosure.”
Update of July 5, 2005: Judge Carol L.
Middlesteadt of San Mateo County Superior Court granted approval to
Ameriquest’s predatory lending settlement in four states, brushing
aside such concerns as whether Spanish-speaking victims received any
meaningful notice. Some say that the political sway of the
plaintiff-side attorneys, who’ll be getting $10 million, played a role
in this substantive language / civil rights issue being given short
shrift. In Re another foreign language, the L.A. Times of June 25 got a
quote from the company on Dutch reports that Roland Arnall is angling
to be named U.S. ambassador to The Netherlands: "Mr. Arnall would be
willing and honored to serve his country in any way he might be asked,"
said Charles Sipkins, a spokesman for the company. "But, such decisions
are up to the president of the United States." One
wag quipped: maybe it’s the Supreme Court, that needs a predatory
lender...
While under investigation in at least 25 states for
predatory lending, Ameriquest is paying $4 million to sponsor the tour
of aging rockers the Rolling Stones beginning in August. The cost was
specified by the CEO of Marketing & Communications International,
who said: "It has advertising, event
marketing, and you'll see different PR, promotion and direct mail
components. This has a lot of touchpoints with the consumer, and each
one of these cross-pollinates very well." Direct mail from a predatory
lender?
We are compelled to note a quote in the American
Banker newspaper’s June 30 article on Ameriquest. The
context: “To counter the allegations, the company's normally reticent
executives - many of whom had never spoken to the press - agreed to
give American Banker a glimpse of its procedures.” The
quote: “Tom Noto, Ameriquest's general counsel, said it prefers to
settle cases where it identifies loan problems it has committed, and
sometimes it is the first to identify the problems. ‘We prefer informal
resolutions,’ he said. ‘Basically, if you see a problem, what's the
point of going to the mat in court? You try to reach a reasonable
resolution.’ His company's approach is ‘to look at the merits of the
case and, if things didn't go according to our procedure, step up to
the plate and address it,’ Mr. Noto said.”
This is the same Tom Noto who filed a heavily
redacted 20-page brief demanding that 41 boxes of Ameriquest-related
documents be withheld from ICP by the Texas Attorney General’s office,
including because the material is copyrighted...
Update of June 27, 2005: While
awaiting the documents that Ameriquest is trying to withhold, we
perused last week Ameriquest’s proposed settlement of predatory lending
claims in four states (California, Texas, Alabama and Alaska). The
proposed settlement, available on this website
www.pierceallsettlement.com, listed Ameriquest’s Adam J. Bass as now
being with the company’s outside counsel, Buchalter, Nemer, Fields
& Younger. Amazingly, the proposed
settlement would force some of those injured to further arbitrate their
claims. And whatever part of the $15 million is not claimed will be
given to groups chosen by Ameriquest. Our
question for now is whether Ameriquest would get a tax write-off...
It is reported that one of the objectors has raised
the issue of ineffective (or nonexistent) notice to Spanish-speakers. Here are the number of Ameriquest loans in
each of the four states in 2004 that were reported as to “Hispanics” --
California:
28,563 loans to Hispanics by Ameriquest in 2004 (11,206 of the loans,
or 39.23%, at or over the rate spread of 3% higher than
comparable Treasuries on a first lien, and 5% on a subordinated lien)
Texas:
5059 loans to Hispanics by Ameriquest in 2004 -- 3889 of the loans, or
76.87%, at or over the rate spread
Alabama:
120 loans to Hispanics by Ameriquest in 2004 -- 92 of the loans, or
76.67%, at or over the rate spread
Alaska:
45 loans to Hispanics by Ameriquest in 2004 -- 24 of the loans, or
53.33%, at or over the rate spread. And
also perhaps (should be) relevant to objection about language / notice,
in Alaska in 2004 Ameriquest made 43 loans to Alaskan Natives, 33 of
76.74% at or over the rate spread...
But now
it’s reported that this objection might be withdrawn, or settled.
Without effective notice?
The LA Times of June 24 reported that “Ameriquest
contended that there was no statistical evidence of bait and switch,
saying most of its borrowers actually wound up with better loans than
initially promised in its written disclosures... ‘The settlement
pertains to nearly 10-year-old issues, and Ameriquest instituted many
years ago lending ... practices and computer systems to better protect
customers,’ the company said in a statement. ‘The settlement cannot be
used to show or even imply that Ameriquest violated any law or
regulation. Ameriquest's lending practices far exceed federal, state
and local regulation.’” Then why is
Ameriquest under investigation by at least 25 states’ attorneys general? And what is in the 41 boxes of documents
Ameriquest is fighting to get the Texas AG to withhold from ICP?
Developing...
Update of June 20, 2005:
Last week Inner City Press received from Ameriquest
a heavily redacted copy of Ameriquest’s twenty page filing to the Texas
Attorney General’s office, urging that all documents responsive to
ICP’s freedom of information request should be withheld. Ameriquest
argues that documents should be withheld because they are copyrighted.
Great argument...
Update of June 13, 2005: On June 8,
Ameriquest said its CEO (and president of Argent) is leaving to pursue
unspecified “opportunities.” Now Aseem Mital, president of Ameriquest
Capital Corp., is to replace him. Nobody at Ameriquest was available
for interviews Wednesday, a company spokesman told the Los Angeles
Times. All we can say is, “Get it
together.”
Update of June 6, 2005: Ameriquest’s
tricks include intimidating borrowers who complain by adding to their
monthly bill a huge amount of attorneys fees they’ll owe, it’s implied,
if they don’t stop complaining. Ameriquest’s role in deed theft /
foreclosure rescue scams is also coming into focus. A stray interim
finding in Ameriquest’s 2004 HMDA data: Ameriquest doesn’t lend in
Virginia or West Virginia, and made only two loans in the District of
Columbia. Thus it tries to stay off the radar of the regulators. But not for long...
Update of May 31, 2005:
Inner City Press / Fair Finance Watch’s inquiry into
Ameriquest continues. In Texas, where access to 41 boxes of documents
from and/or about Ameriquest is being blocked, notice has been given to
Ameriquest’s general counsel and the company’s outside counsel at
Kirkpatrick & Lockhart and another firm. Sample complaints have
been received from Kentucky: copies of letters to the complaining
consumers, stating for example that “regrettably we have referred this
matter to our foreclosure department for further handling.” That recent
advertisements, including on Indy 500 car(s), have been for “Argent
Mortgage” is interesting. Preparing for a spin-off? Developing...
May
23, 2005
Ameriquest Watch Launched by Inner City
Press / Fair Finance Watch
Ameriquest Capital Corporation, a subprime mortgage
lender which admits in a recent SEC filing to being under investigation
for predatory lending in at least twenty-five states, tries to present
itself to the public as the “Sponsor of the American Dream.” If so, it
is a bad dream. ICP has received numerous complaint from consumers
about Ameriquest; as Inner City Press / Fair Finance Watch has sought
to assess Ameriquest’s record, the company has sought to stymie the
inquire at every turn. On May 17, ICP was informed by the office of the
Texas Attorney General that while that Office has forty-one boxes of
documents from or about Ameriquest, the information will not for now be
released in response to ICP’s May 2 Freedom of Information request,
because Ameriquest wants to block release of any of the information.
What would the supposed sponsor of the American
Dream have to be so defensive about? That
is a question that ICP will endeavor to answer in this, its new
Ameriquest Watch. Because Ameriquest is not affiliated with a bank, in
the course of ICP’s Community Reinvestment Act enforcement work we’ve
put off focusing closely on Ameriquest. We’ve expressed concern (for
example to the Federal Reserve Board in 2000, see 86
Fed. Res. Bull. 751, n.23, and see, e.g., Los Angeles
Times of March 15, 2005); we requested from Ameriquest its 2004
mortgage lending data. When the data wasn’t provided on time, we noted
Ameriquest’s lapses, along with that of a number of institutions. The
next day, one of Ameriquest’s apparently many public relations flacks
left ICP a vitriolic voice mail message, demanding the retracting of
ICP’s “false and misleading” statements. But there was nothing
misleading, much less false, about noting that more than a month had
gone by since ICP’s request to Ameriquest’s headquarters without the
provision of the data. More recently, another flack has called ICP, to
discuss a forthcoming article. Again: what would the supposed sponsor
of the American Dream have to be so defensive about?
Some surmise that the defensiveness, the reflexive
attacking of critics and its inverse, are explained by Ameriquest’s
reported plan to go public, in whole or in part. Some predict the
spin-off, via initial public offering, of Ameriquest’s wholesale
mortgage unit, Argent. In this scenario, Ameriquest wants a quick
multi-state settlement, not unlike Household International’s settlement
in late 2002, in order to put the scandals behind it and focus on
future profits. Reportedly, Ameriquest wants to pay less than
Household’s fine of $486 million, despite the fact that Ameriquest in
2004 made many more subprime loans that Household in 2001, or 2002, or
2004. ICP has reviewed Ameriquest’s 2004 data, nationwide and in
selected states, in connection with ICP’s petition to state attorneys
general to take enforcement action against Ameriquest. The results are
not pretty:
Ameriquest -- Whites: 1,267,121 applications,
leading to 281,808 denials (22.24% denied) and 338,800
originations; 179,665 [or 53.03 percent] exceeded rate spread.
African Americans: 246,568 applications, leading to 64,566
denials (26.19% denied, 1.18 times higher than whites) and 67,586
originations; 43,847 [or 64.88 percent] were at rate spread [1.22 times
higher / more likely to be over rate spread than whites].
Latinos: 237,824 applications, leading to 43,971 denials
(18.43% denied, 0.83 times “higher” than whites) and 83,405
originations; 43,625 [or 52,31 percent] at rate spread [0.99 times
higher / more likely to be over rate spread than whites].
That Ameriquest, the increasingly
discredited subprime lender admittedly under investigation by twenty
five states, in 2004 made the most loans to African Africans, both over
the high cost rate spread and overall, is a reflection of a two-tier
financial system, one which is separate and unequal, including as to
interest rate. We have now asked for more than forty five states to
take action on Ameriquest.
Also not pretty is Ameriquest’s marketing. For
example, last month in San Francisco a federal judge granted a petition
filed by the Federal Trade Commission and the California attorney
general, which sought a temporary restraining order and asset freeze
against Optin Global Inc., its related companies and owners. According
to the FTC, the company’s spam messages directed consumers to Web sites
run by the defendants, with consumer data eventually being sold through
intermediaries to mortgage lenders and brokers such as Ameriquest
Mortgage Co.. So that’s how Ameriquest buys consumers’
information...
Of course, you wouldn’t know any of this from
Ameriquest’s 30-minute infomercial featuring ex-gameshow host Chuck
Woolery. The classic line from the show: “Something is wrong with these
people, it’s not a normal company.” No, it’s not...
For further information, click here to contact us
Copyright
2005-2007, Inner City Press/Community on the Move, Inc..
All rights reserved. For further
information, Phone: (718) 716-3540. E-mail: Ameriquest-Watch
[at] innercitypress.org
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