Ameriquest Mortgage
 | |
| Industry | Investment services |
|---|---|
| Founded | 1979 Orange County,California,U.S.[1] |
| Founder | Roland Arnall |
| Defunct | 2007 |
| Fate | Chapter 11 liquidation |
| Successor | |
| Headquarters | Los Angeles,California, United States |
Area served | United States |
| Products | |
Number of employees | 2,000 (2007) |
| Website | Ameriquest Mortgage |
Ameriquestwas one of the largestUnited Statessub-primemortgagelenders until its dissolution in September 2007. Among the first mortgage companies employingcomputersto solicitprospective borrowersand hasten the loan application process, Ameriquest was accused ofpredatory lendingpractices byUnited States banking regulators.[citation needed]The company was notable for its promotion of thestated income loan,whereby potential borrowers were allowed to claim income withoutverification of employment.The proliferation of lending to customers with marginalcreditworthinessproved to be not only a key factor leading to the2007 subprime mortgage financial crisis,but also a catalyst to Ameriquest's own demise.[2][3]
Ameriquest was widely known throughout theUnited Statesfor itspromotional activity.Itadvertisedwidely ontelevision;flewblimpsoverfootballandbaseballstadiums; andsponsoredtheRolling Stones'A Bigger Bang tour,theSuper Bowl XXXIXhalftime show, andNASCARdrivers.
History[edit]
Ameriquest was founded in 1979 byRoland Arnall,inOrange County, California,as asavings and loan association,orthrift,called Long Beach Savings & Loan. After moving toLong Beach, Californiaand being converted to a puremortgage lenderin 1994, the company was renamed Long Beach Mortgage Co. In 1997, the department that funded loans made by independentbrokerswas spun off into apublicly traded companythat was ultimately purchased byWashington Mutualin 1999.[citation needed]
Long Beach Savings & Loan was subsequently reorganized into three divisions under the auspices ofACC Capital Holdings,aprivate conglomerateowned entirely by Arnall: Ameriquest Mortgage Company (retail banking), Argent Mortgage (wholesale banking), and AMC Mortgage Services (loan servicing).[citation needed]
In 2004 alone, Ameriquest was estimated to haveoriginatedover $50 billion in new subprime mortgages.[4]
On September 1, 2007,Citigroupcompleted its acquisition of Argent Mortgage and AMC Mortgage Services, shutting down Ameriquest Mortgage.[5][6]
Predatory lending allegation[edit]
In 1996, the company agreed to pay $3 million into an "educational fund" to settle aJustice Departmentlawsuit accusing it ofgougingandpredatory lendingpractices against older, female, and minority borrowers. Prosecutors accused it of allowing mortgage brokers and its own employees to charge these customers an additional fee of as much as 12 percent of the loan amount. As part of thesettlement,Ameriquest agreed to use the educational fund to train its employees in proper mortgage techniques and to refrain from utilizing predatory lending techniques, but only within the State ofCalifornia.[7]
In 2001, after being investigated by theFederal Trade Commission,the company settled a dispute withACORN,a national organization of community groups, promising to offer $360 million in low-cost loans.[citation needed][5]
In February 2005, reportersMichael Hudsonand E. Scott Reckard broke a story in theLos Angeles Timesabout "boiler room"sales tactics at Ameriquest. Their investigation found evidence that the company had undertaken various questionable practices, including" deceiving borrowers about the terms of their loans,forgingdocuments, falsifyingappraisalsand fabricating borrowers' income to qualify them for loans they couldn't afford. "[4]
On August 1, 2005, Ameriquest announced that it would set aside $325 million to settle investigations by 30state attorneys generalinto allegations that it had preyed on borrowers by offering loans withhidden feesandballoon payments.[8]In at least five of those states—California,Connecticut,Georgia,Massachusetts,andFlorida—Ameriquest had already settled multimillion-dollar suits.Federal Housing AdministrationcommissionerBrian Montgomerystated that the settlement reinforced his concern that the industry was exploiting borrowers and that he was "shocked to find those customers had been lured away by the 'fool's gold' of subprime loans ".[8]
On June 13, 2007, lawyers for borrowers seekingclass statusasserted in a filing with theDistrict Court for the Northern District of Illinoisthat "assets of the Ameriquest entities weretransferredto Arnall with the actual intent to hinder, delay, ordefraudtheplaintiffsin this action. "[9]
Former Ameriquest employees alleged that they were pushed to falsify documents on bad mortgages and then sell them toWall Streetbanks looking to make fast profits.[3]There is growing evidence that suchmortgage fraudmay have been at the heart of thefinancial crisis of 2007 to 2010.[3]
See also[edit]
References[edit]
- ^"History of the Lehman Brothers".Harvard University Library-Lehman Brothers Collection.Retrieved2010-12-01.
- ^Paul Muolo and Mathew Padilla (2 February 2010).Chain of Blame.John Wiley & Sons,2008, 2010. p. 86.ISBN978-0-470-55465-4.
- ^abc"Road to Ruin: Mortgage Fraud Scandal Brewing".American News Projecthosted byThe Real News.May 13, 2009.
- ^abHudson, Mike; Reckard, E. Scott (February 4, 2005)."Workers say lender ran 'boiler rooms'".Los Angeles Times.Retrieved26 May2018.
- ^ab"Ameriquest, a Subprime Lender, Is Closing".The New York Times.Reuters. 2007-08-31.ISSN0362-4331.Retrieved2018-05-15.
- ^Reckard, Scott E. (September 1, 2007)."Citi to buy remains of Ameriquest".Los Angeles Times.No. C-1. Archived fromthe originalon September 10, 2008.Retrieved26 May2018.
- ^Simpson, Glenn R. (2007-12-31)."Lender Lobbying Blitz Abetted Mortgage Mess".Wall Street Journal.ISSN0099-9660.Retrieved2022-01-31.
- ^abBecker, Jo; Sheryl Gay Stolberg; Stephen Labaton (December 20, 2008)."White House Philosophy Stoked Mortgage Bonfire".New York Times.
- ^Reckard, E. Scott (June 19, 2007)."Lawsuit sets sights on Ameriquest founder".Los Angeles Times.Retrieved28 May2018.
External links[edit]
- Mortgage lenders of the United States
- American companies established in 1979
- Financial services companies established in 1979
- Financial services companies disestablished in 2007
- Defunct companies based in California
- 1979 establishments in California
- 2007 disestablishments in California
- Subprime mortgage lenders
- Subprime mortgage crisis
- Companies that filed for Chapter 11 bankruptcy in 2007