MORTGAGE MOOCH

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Ameriquest, a subsidiary of ACC Capital Holdings Corporation, the largest sub-prime lender in the country, agreed to a $325 million settlement last week after a two-year investigation led by the California Attorney General. The AG found that Ameriquest regularly failed to disclose prepayment penalties, inflated appraisals and misrepresented buyers’ credit ratings. The settlement is the second largest ever involving an alleged predatory lender; the largest was the $484 million settlement involving Household Finance Corporation in 2002. Roughly $295 million of the $325 million settlement will go to customers in 49 states who purchased homes using Ameriquest. New York State Attorney General Elliot Spitzer estimates that 22,000 New Yorkers will receive approximately $22 million—or about $1,000 per eligible person. Yet not everyone is thrilled with the settlement. Matthew Lee, executive director of the Inner City Press, which publishes Ameriquest Watch, thinks the public is owed more. Lee pointed out that Argent Mortgage, the largest lending unit of ACC, made 30,000 more loans than Ameriquest in 2004, but was not affected by the settlement. “In addition,” he said, “it’s not at all clear to us that the amount people will receive—whether it’s $300 or $1000—will do any good. For someone that has gotten raked over the coals by Ameriquest, what are they going to do with such a small amount?” (G. Thompson) [01/30/06]