ACC Capital Holdings Corp., owner of Ameriquest Mortgage Co., will pay $325 million in restitution and fines, according to a settlement announced by several states yesterday.
Ameriquest, Orange, CA, did not admit to any wrongdoing as part of the deal. The settlement involves 30 states and is expected to include all 49 states where the company operates. The agreement follows a two-year multistate investigation led by several state attorneys general alleging that Ameriquest violated state laws by misrepresenting loan terms and failing to disclose material information to borrowers.
According to the Massachusetts Attorney General’s office, consumers reported that they contacted Ameriquest after receiving direct mail from the company or saw a television commercial encouraging them to call and learn more about how to reduce their mortgage payments. Ameriquest promised certain refinance loan terms to reduce mortgage payments, but when consumers finally closed on the loans, the terms often were significantly different.
The nation's largest subprime lender also has agreed to change its business practices to settle allegations that it falsified home values and borrower incomes and used other high-pressure and unfair tactics.
“This company promised cheaper monthly payments, better terms and cash on time. Instead, consumers only got higher rates, prepayment penalties and large point charges,” Massachusetts Attorney General Tom Reilly said in a statement.
Eligible Ameriquest customers are those who obtained new mortgages between Jan. 1, 1999, and April 1, 2003.