States Follow Long Trail of Complaints Against Lender (Ameriquest inflated appraisals)

Ameriquest Mortgage Co. said Monday that authorities in 25 states had raised questions about its lending practices, including the accuracy of its appraisals and how loan terms are described in spoken statements to borrowers.

The Orange County-based company also said it had agreed to pay up to $50 million to settle a class-action lawsuit that alleges it defrauded thousands of borrowers in four states, including California.

Ameriquest, the nation's largest mortgage lender to people with spotty credit or modest incomes, said it had "valid responses" to the concerns raised by attorneys general and other regulators in the 25 states and was in discussions with them.

Still, the disclosure underscored the widespread interest in the company, which has been the target of consumer complaints and suits alleging a pattern of fraud, falsification of documents and bait-and-switch sales tactics.

Last month, The Times reported that former Ameriquest loan agents around the country had complained that pressure to write loans caused some employees to forge documents and push appraisers to inflate home values so that hard-pressed borrowers could qualify for mortgages.

The company first disclosed that it had been talking with state financial regulators and attorneys general in a Feb. 23 Securities and Exchange Commission filing, a prospectus for potential buyers of interest-paying bonds backed by streams of payments from Ameriquest loans.

They sound like serial abusers.

Based in Orange, Ameriquest Mortgage is a unit of privately held Ameriquest Capital Corp. Its founder and majority owner is Los Angeles billionaire Roland Arnall, a major contributor to Gov. Arnold Schwarzenegger and other politicians.
In 1996, the company, then known as Long Beach Mortgage Co., paid $4 million to settle U.S. Justice Department charges that its lending practices cheated minorities, women and elderly people.
The Federal Trade Commission suspended an investigation into Ameriquest's lending in 2001, after the company promised to adopt "best practices" that would set a standard for subprime lenders and pledged to make $360 million in low-cost loans to borrowers identified by ACORN, a national grass-roots group.
The San Mateo County class-action suit, filed by Burlingame, Calif., law firm Cotchett, Pitre, Simon & McCarthy, accused Ameriquest employees of surprising borrowers at loan closings with high fees and interest rates that often were markedly higher than had been promised in good-faith estimates of the loan costs.
Employees used ruses such as telling the borrowers their old loans had already been paid off to pressure them into accepting new loans, the lawsuit says.

Unless Ameriquest "changed" the appraisals, I can't see an independant appraiser risking their license and going to jail for $400 bucks. Appraising is by no means an exact science, but since the savings and loan fiasco, since 1989 they have to follow very strict USPAP guidelines.

There have been a lot of examples of "friendly appraisals" around the country. Just look at the Poconos several years ago.

http://www.poconorecord.com/report/price2high/

You may think this never happens, but it has happened before, particular in LA. History repeats itself.

THIS IS VERY TRUE. I WORKED AS A LOAN PROCESSOR @ AMERIQUEST IN EASTLAKE OHIO AND JUST QUIT LAST THURSDAY 4/14/05 BECAUSE IT WAS THE MOST UNETHICAL PLACE EVER. THE BRANCH MANAGER MANAGED TO GET UPWARDS OF $10K+ BUMPS ON APPRAISALS, ANOTHER LOAN PROCESSOR AND A FEW ACCOUNT EXECUTIVES WOULD ACTUALLY CUT AND PAST THE BORROWERS SIGNATURES OFF OF OTHER DOCS. TO FORGE INCOME, CALL AND PRETEND TO BE THE BOPRROWER TO GET PAYOFFS, MORTGAGE HISTORIES......THEY TREAT THEIR EMPLOYEES LIKE DIRT AND WORKED US FROM 8AM TIL SOMETIMES 11PM OR LATER WITH YOUR JOB ON THE LINE IF YOU LEFT OR COMPLAINED.
I HAVE SMALL CHILDREN AND NEVER SAW THEM, PLUS OUR OFFICE WAS BEING INVESTIGATED AND I HAVE 8 YEARS IN THE MORTGAGE INDUSTRY UNDER MY BELT, I DID NOT WANT TO LOSE MY JOB OVER A******* SO I QUIT. THE BRANCH MANAGER FORCED ME TO LEAVE A FEW DAYS AFTER I GAVE MY NOTICE WITH NO PAY.
IT'S NOT JUST THAT BRANCH, IT HAPPENS AT ALL THE ONES IN OHIO AT LEAST. I HAVE NO CLUE HOW TO MAKE IT STOP. IMAGINE BEING TOLD YOUR HOUSE IS WORK $125K BY AMERIQUEST, AND WHEN U GO TO REFI A FEW YEARS LATER, ITS ONLY WORTH $115K AND U NOW OWE THAT MONEY PLUS INTEREST. IT IS WRONG AND DISGUSTING AND I HAVE NO CLUE WHO TO TELL ABOUT IT!!!

SMOLDERRED@SBCGLOBAL.NET

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