Washington State Department of Financial Institutions

News Release


Friday, December 14, 2007

Kristin Alexander, Media Relations Manager, Attorney General’s Office
PH (206) 464-6432 kalexander@atg.wa.gov

David Huey, Assistant Attorney General
PH (253) 593-5057

James Brusselback, Enforcement & Complaints Program Manager, DFI
PH (360) 902-0511 jbrusselback@dfi.wa.gov

Lyn Peters, Director of Communications, DFI
PH (360) 902-8731 lpeters@dfi.wa.gov


Thousands Of Washington Residents To Receive Ameriquest Checks Next Week

Washington agencies continue working to address the subprime meltdown

OLYMPIA – December will be a bit more rewarding for 8,750 Washington residents. They’ll receive checks this month totaling nearly $9.9 million as part of a national settlement against former subprime lending giant Ameriquest.

Attorney General Rob McKenna and Scott Jarvis, director of the Department of Financial Institutions (DFI), announced today that the checks are in the mail from the settlement administrator and should arrive at homes within a week. Consumers will receive payments as little as $47 to as much as $7,950, depending on when they applied for a loan and individual circumstances. The average check is $1,130. The money comes from last year’s $325 million national settlement, in which states alleged widespread fraud by Ameriquest as part of a high-pressure scheme to sell mortgages that trapped consumers into debt and put them at risk of losing their homes.

“We’re glad to be able to put money back into the pockets of families whose American dream of homeownership became a nightmare,” McKenna said. “The Ameriquest settlement continues to serve as a serious warning to the subprime mortgage industry that we won’t tolerate predatory lending.”

The Ameriquest settlement ranks as the second-largest government consumer protection settlement in history. The states alleged that Ameriquest deceived consumers, inflated home appraisals, and fabricated employment and income information in order to make the largest possible profit. Consumers were tied into loan balances significantly higher than the true value of their homes, which ultimately blocked them from refinancing with other lenders or selling without taking a substantial loss.

“Many Ameriquest victims were already homeowners who thought they’d save money by refinancing but instead were trapped into mortgages they couldn’t repay,” McKenna said.

“DFI continues in its efforts to educate and protect Washington consumers so they are less likely to become victims of predatory lending practices,” Jarvis said. “If and when consumers do fall victim to unethical and/or illegal practices, we are here to ensure perpetrators are held accountable. This settlement is just one example of our commitment to helping Washington families and carrying out the DFI mission of protecting the public, promoting economic vitality and preserving integrity in the marketplace.”

Nationwide, 64 percent of the borrowers who were eligible for restitution agreed to participate in the settlement by filling out refund request forms prior to the Sept. 10 deadline. Washington’s participation was slightly higher. A little more than 70 percent of the 12,369 Washington residents who were eligible for restitution will receive checks – and they will receive larger payments than borrowers in other states.

The payments are higher because Washington received more money for legal costs as a result of its leadership role in the investigation and settlement negotiations. The Attorney General’s Office and DFI agreed to add more than $2 million of those funds to the restitution pool in order to provide larger payments to consumers.

Among other things, the states’ settlement required Ameriquest to provide full disclosure regarding interest rates, discount points, prepayment penalties, and other loan or refinancing terms. The company must also ensure that every loan benefited borrowers, not only Ameriquest and its commissioned employees.

ACC Capital Holdings, Ameriquest’s parent company, announced on Aug. 31, 2007, that it was closing Ameriquest, no longer taking retail loan applications. At the same, it sold Argent, its wholesale loan servicing unit, to Citigroup.

Washington agencies are now turning their attention to dealing with an anticipated increase in foreclosures as borrowers with adjustable rate mortgages see significant increases in their loan payments amid declining property values. Among their efforts:

Consumer Information
Detailed information about the Ameriquest settlement and restitution is available at www.ameriquestmultistatesettlement.com. Consumers also may contact the settlement administrator at 1-800-420-5875. (Hearing-impaired persons may call 866-494-8274.)

Ameriquest Case History
Information about the Ameriquest settlement and court documents are available at http://www.dfi.wa.gov/cs/ameriquest.htm.

About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334 ▪ In Espaņol 888.976.4422

The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders, and securities brokers and dealers. The department has won numerous awards for its financial literacy and outreach programs developed to protect consumers from financial fraud. In addition to posting information about licensees and administrative actions, the DFI’s Web site features consumer tips on a variety of financial fraud-related topics.