Ameriquest, the lender the epitomized everything that was f*cked up about the subprime mortgage meltdown, is dead.
The lender stopped taking loan applications Aug 1st and its assets (including $45 billion of loans) were sold to Citigroup late last month.
Last year Ameriquest agreed to pay $325 million in a multistate class-action settlement over claims of deceptive lending practices which included failing to disclose that the loans had adjustable rates, failing to disclose the terms of the loan, refinancing homeowners into inappropriate loans, inflating home appraisals, and charging excessive fees such as prepayment penalties and loan origination fees. Ameriquest did not admit wrongdoing.
Earlier this year a number of former Ameriquest mortgage brokers spoke to NPR, detailing the steady diet of corruption that led to Ameriquest’s downfall. Commonplace tactics included “sending papers to the Art Department,” a term that was code for forging w2s in order to qualify consumers for loans they couldn’t afford.
If consumers qualified for a fixed rate mortgage, they often told that their mortgages were fixed for “as long as they wanted” when in reality, they were only fixed for 2 years. In order to fool the applicants into signing up for the pricier loan, fixed rate mortgage papers were stacked on top of variable rate ones. After tricking the customer into signing all of them, the fixed rate papers were discarded.
There is a little bit of a happy ending to the story: If you were defrauded by Ameriquest, you may have some money coming to you in the form of a class action settlement. It may be cold comfort some, but hey, its money. To see if you qualify, click here. The deadline is today.
So long, Ameriquest. You will not be missed.