Topic: Mortgage News
LOS ANGELES -- Jan. 23, 2006 -- The parent company of mortgage lender Ameriquest has agreed to pay $325 million to settle investigations into its practices by attorneys general in several states.
Ameriquest lends to people with poor credit and modest incomes. It is the nation's largest sub-prime mortgage lender. Civil lawsuits by consumers in California and other states claim a pattern of fraud, bait-and-switch sales tactics and other violations. Accusations include forging documents to lying about borrowers' income to qualify them for loans they can't afford.
The settlement involves 30 states and is expected in the end to include all 49 states where the company operates, according to a statesperson.
It's parent company has agreed to many changes in company practices, including providing borrowers with clearer disclosures on the terms of their loans.
Under the terms of the settlement, Ameriquest will have to reform its business practices, including...
• A clearer form that explains in simple language the terms of a loan, including rates, points and penalties, if any.
• Giving borrowers notice before closing on their loan if any changes are made to the loan terms.
• Verbal disclosures by loan officers to ensure borrowers are clear on the financial terms of their loans.
• Borrowers applying for stated income loans, or loans in which borrowers don't offer proof of income, will have to sign statements certifying they're telling the truth.
• Ameriquest also agreed to use independent closing agents and to select appraisers randomly, in order to eliminate potential conflicts of interest with lending agents.
Posted by trishjax
at 1:19 PM EST
