Just clearing off junk from the hard drive. Here is another one of my recent “things that make you go, “Hmmmmm.”:
Ameriquest cashing out? Their parent company has just announced (last week –
This week's announcement follows a $325 million nationwide settlement in January. Ameriquest’s parent company and its subsidiaries agreed to pay $295 million to consumers. It also agreed to make sweeping reforms of practices that states alleged amounted to predatory lending. Ameriquest also agreed to pay $30 million to 49 states and the
Ameriquest denied all the allegations of predatory lending raised by the states. Despite their innocence, they just handed over the cash. Now that the company is $325 million poorer, it is time to downsize.
Reading that, from last week, puts the following in an interesting perspective:
Bush Picks Ameriquest Owner as Ambassador
On the same day that the White House announced that President Bush is nominating
Arnall's company, Ameriquest Mortgage Co., is being investigated by regulators in 30 states. A $325 million settlement would be one of the largest ever in a predatory lending case.
Ameriquest is the nation's biggest privately held mortgage company. The company, which is in negotiations with a group of attorneys general to resolve the investigations, said in a filing with the Securities and Exchange Commission yesterday that the amount "represents the company's best estimate of its maximum financial liability for a comprehensive resolution of this matter." Arnall is the firm's principal shareholder. He, his wife and their companies have been the biggest political contributors to Bush since 2002.
Speaking about the ambassadorial nomination, White House spokeswoman Erin Healy said: "The president . . . feels Mr. Arnall is well qualified for the position. He had a long career in the private sector and has contributed a great deal to his community."
In a written statement, Arnall said he was "humbled and honored" to be nominated. Ameriquest is facing complaints of wrongdoing from coast to coast, with thousands of customers seeking restitution. The
"We've made a lot of progress, but the talks are continuing," said Connecticut Attorney General Richard Blumenthal, who is in the group negotiating with Ameriquest. He said his office had received hundreds of complaints, "numerous and long-standing," about the lender. In response to requests for comment, Ameriquest yesterday issued a statement that said it "continues to be engaged in discussions with a number of state attorneys general and regulators about the company's business practices. We are focused on resolving the issues under discussion with these agencies and hope to reach a reasonable resolution that is fair to our customers and fair to the company. We do not comment on the specifics of regulatory or legal matters."
In depositions, Ameriquest customers have alleged that they were promised good loan terms but instead got high rates, sometimes higher than they had previously been paying; that their incomes were overstated so they could qualify for the high-price loans; that appraisers overvalued their homes so they seemed valuable enough to secure the loan; and that they learned only after closing that they would be required to pay steep prepayment penalties if they sought to move to other lenders.
Patti Thompson, a secretary, was paying 6.1 percent on the $175,000 loan on her
The hastiness of the transaction raised "red flags" for the Thompsons, and they tried unsuccessfully to cancel the transaction. They went to another lender, who reviewed their documents and told them their interest rate had been increased to 9.1 percent and that they had been charged $17,000 in settlement costs, bringing their new loan total to $193,000. Their monthly payment rose from $1,300 a month to $1,700 a month. The company did not pay off the credit cards, according to Thompson, and she and her husband filed for bankruptcy in April. An Ameriquest spokesman said the company would not discuss specific cases but "works very hard" to resolve problems.
Thompson was stunned to learn that the White House would consider Arnall for such a prominent post. "Does Bush realize what they are doing?" she said. "I hope not. This guy is ripping off people, hardworking people."