Julio E. Sune Jr. (FL)
Senior Member
- Joined
- Jan 16, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Florida
AMERIQUEST ACCUSED OF FRAUDULENT LENDING PRACTICES
FACTS
Customers and former employees of Ameriquest Capital Corp., the nation's largest sub-prime mortgage lender, have claimed in court documents and interviews that the company has engaged in improper practices ranging from forging documents to lying about borrowers' income to qualify them for loans they can't afford.
Recent lawsuits filed against Ameriquest by consumers in California and at least 20 other states allege a pattern of fraud, falsification of documents, bait-and-switch sales tactics and other violations. In one lawsuit, a former loan officer, Kenneth Kendall, said Ameriquest managers encouraged workers to "promise certain interest rates and fees, only to change those rates at the time of the closing." Other ex-workers interviewed by the Los Angeles Times compared Ameriquest operations to a "boiler room" and said the drive to close deals led some employees to forge documents and the creation of "juiced" mortgages with hidden rates and fees.
An East Palo Alto resident, Sara Landa, said Ameriquest employees tricked her into signing a mortgage that required her to pay $2,494 a month, more than she earns cleaning houses. All the negotiations were in Spanish, according to Landa 's lawsuit, but all the loan documents were in English-a language in which she's not proficient.
"The only thing she ever got from Ameriquest that was in Spanish was a foreclosure notice," said her lawyer, Nathaniel McKitterick. Landa and Ameriquest reached a confidential settlement in December, 2004.
Ameriquest told the Times that it does not comment on pending legislation. The company also noted that since 2003, it has put in place an automated system that allows loan officers to lower rates, but not raise them. One common issue in borrower lawsuits and interviews with ex-workers concern allegations of falsified documents. For example, in a lawsuit filed in January in U.S. District Court in San Francisco, Nona Knox alleged that Ameriquest approved her and her late husband, Albert, for a loan by falsely stating on documents that he earned $6,800 a month as proprietor of Knox Music Academy. The lawsuit said that Albert Knox was 79 at the time of the loan, suffering from terminal cancer and the music school never existed. "Mr. Knox had never played a musical instrument," said Aaron Myers, an attorney for Nona Knox. "This was truly made up out of whole cloth without their knowledge or consent, or any suggestion from them." Ameriquest has not yet formally responded to Knox's lawsuit, which is seeking class-action status. Before the lawsuit, the company denied anything was wrong with the loan.
Ameriquest, based in Orange, Calif., is one of the nation's largest lenders to borrowers who have tarnished credit histories or other difficulties getting loans. Among other legal actions pending against Ameriquest: Connecticut banking regulators moved last month to yank lending licenses from Ameriquest and an affiliate, accusing the company of repeatedly overcharging its customers, state documents show.
Ameriquest marketed itself as a leader in rooting out so-called " predatory lending" practices, which include packing loans with excessive fees and commissions. In 1999, Ameriquest was one of the first subprime lenders to adopt specific lending guidelines designed to eliminate bad practices. However, Ameriquest has been the subject of far more complaints to the California Department of Corporations than New Century in recent years. Between 2000 and 2004, consumers filed 134 lending complaints against Ameriquest compared to 39 for New Century, said department spokeswoman Susie Wong. Wong declined to say whether the department is investigating the complaints against Ameriquest.
Ameriquest customers filed more complaints with the Federal Trade Commission from 2000 through 2004 than did those of two of its biggest competitors combined, the agency said -- 466 compared with 101 for Full Spectrum Lending (Calabasas-based Countrywide Financial Corp.'s sub-prime unit) and 51 for Irvine-based New Century Financial Corp.
In Connecticut, a hearing is scheduled for March 31, 2005 on the Connecticut Department of Banking's proposal that 24 lending licenses held by Ameriquest and a subsidiary not be renewed. Ameriquest has been accused of charging excessive refinance fees from 179 Connecticut customers in the past three years -- 39 of them after the firm settled with the state over similar allegations by agreeing to pay nearly $670,000 in refunds and penalties. Losing the licenses could mean that Ameriquest would stop offering loans in Connecticut. The company also faces as much as $5.5 million in additional penalties. (ap2405, latimes2405, ocregister2505)
MORAL
Does this scenario sound familiar? Think hard. Wasn't there another company with the same problem a couple of years ago? It may be this company will go the way of that one. May be some people should be looking for other jobs?
FACTS
Customers and former employees of Ameriquest Capital Corp., the nation's largest sub-prime mortgage lender, have claimed in court documents and interviews that the company has engaged in improper practices ranging from forging documents to lying about borrowers' income to qualify them for loans they can't afford.
Recent lawsuits filed against Ameriquest by consumers in California and at least 20 other states allege a pattern of fraud, falsification of documents, bait-and-switch sales tactics and other violations. In one lawsuit, a former loan officer, Kenneth Kendall, said Ameriquest managers encouraged workers to "promise certain interest rates and fees, only to change those rates at the time of the closing." Other ex-workers interviewed by the Los Angeles Times compared Ameriquest operations to a "boiler room" and said the drive to close deals led some employees to forge documents and the creation of "juiced" mortgages with hidden rates and fees.
An East Palo Alto resident, Sara Landa, said Ameriquest employees tricked her into signing a mortgage that required her to pay $2,494 a month, more than she earns cleaning houses. All the negotiations were in Spanish, according to Landa 's lawsuit, but all the loan documents were in English-a language in which she's not proficient.
"The only thing she ever got from Ameriquest that was in Spanish was a foreclosure notice," said her lawyer, Nathaniel McKitterick. Landa and Ameriquest reached a confidential settlement in December, 2004.
Ameriquest told the Times that it does not comment on pending legislation. The company also noted that since 2003, it has put in place an automated system that allows loan officers to lower rates, but not raise them. One common issue in borrower lawsuits and interviews with ex-workers concern allegations of falsified documents. For example, in a lawsuit filed in January in U.S. District Court in San Francisco, Nona Knox alleged that Ameriquest approved her and her late husband, Albert, for a loan by falsely stating on documents that he earned $6,800 a month as proprietor of Knox Music Academy. The lawsuit said that Albert Knox was 79 at the time of the loan, suffering from terminal cancer and the music school never existed. "Mr. Knox had never played a musical instrument," said Aaron Myers, an attorney for Nona Knox. "This was truly made up out of whole cloth without their knowledge or consent, or any suggestion from them." Ameriquest has not yet formally responded to Knox's lawsuit, which is seeking class-action status. Before the lawsuit, the company denied anything was wrong with the loan.
Ameriquest, based in Orange, Calif., is one of the nation's largest lenders to borrowers who have tarnished credit histories or other difficulties getting loans. Among other legal actions pending against Ameriquest: Connecticut banking regulators moved last month to yank lending licenses from Ameriquest and an affiliate, accusing the company of repeatedly overcharging its customers, state documents show.
Ameriquest marketed itself as a leader in rooting out so-called " predatory lending" practices, which include packing loans with excessive fees and commissions. In 1999, Ameriquest was one of the first subprime lenders to adopt specific lending guidelines designed to eliminate bad practices. However, Ameriquest has been the subject of far more complaints to the California Department of Corporations than New Century in recent years. Between 2000 and 2004, consumers filed 134 lending complaints against Ameriquest compared to 39 for New Century, said department spokeswoman Susie Wong. Wong declined to say whether the department is investigating the complaints against Ameriquest.
Ameriquest customers filed more complaints with the Federal Trade Commission from 2000 through 2004 than did those of two of its biggest competitors combined, the agency said -- 466 compared with 101 for Full Spectrum Lending (Calabasas-based Countrywide Financial Corp.'s sub-prime unit) and 51 for Irvine-based New Century Financial Corp.
In Connecticut, a hearing is scheduled for March 31, 2005 on the Connecticut Department of Banking's proposal that 24 lending licenses held by Ameriquest and a subsidiary not be renewed. Ameriquest has been accused of charging excessive refinance fees from 179 Connecticut customers in the past three years -- 39 of them after the firm settled with the state over similar allegations by agreeing to pay nearly $670,000 in refunds and penalties. Losing the licenses could mean that Ameriquest would stop offering loans in Connecticut. The company also faces as much as $5.5 million in additional penalties. (ap2405, latimes2405, ocregister2505)
MORAL
Does this scenario sound familiar? Think hard. Wasn't there another company with the same problem a couple of years ago? It may be this company will go the way of that one. May be some people should be looking for other jobs?
