From $2 Million To Foreclosure On An Ameriquest Subprime Mortgage

Frances Joy Taylor had had about $2 million in assets, which she intended to leave to her church, before she met a businessman named Tyrone Dash. Dash took over her affairs and “methodically liquidated or leveraged almost everything she owned: her bank accounts and securities, her insurance policies, her credit cards, her two apartment buildings and, ultimately, her home,” says the Seattle Times. Frances suffers from Alzheimer’s.

The entire story is horrific, but the most relevant part for our purposes comes at the end, when Frances’ finances have been so wrecked that Dash can only borrow from now-defunct subprime lender Ameriquest:

A year later, Frances paid the prepayment penalty of $4,350 to refinance her home again, this time with Ameriquest Mortgage, then the nation’s largest private subprime lender. A 26-year-old salesman in Tukwila collected Frances’ information and set up the loan. He then sent it to the company’s underwriting department for approval.

The salesman, Laughton Dean Fisher, had a technical-school degree in electronics. He earned a monthly salary of $2,000 but made most of his income in commissions.

In a handwritten application, Frances’ age is listed correctly, but the Ameriquest records repeatedly showed her as 30 years younger — at 62 years old. Fisher, who no longer works for Ameriquest, couldn’t explain the error. He said, however, that the company forbade selling adjustable loans to anyone older than 65.

The company listed Frances’ income for the previous year at $32,000 a month — treating transfers between her accounts as income.

Frances paid Ameriquest $18,000 in fees for the loan, a $297,500 adjustable-rate mortgage, in July 2003.

Nine months later, Frances applied for another refinance from Ameriquest. The timing violated a rule Ameriquest had adopted in 2000 to stop a Federal Trade Commission investigation into allegations of predatory lending. That rule required Ameriquest to wait at least two years before refinancing one of its customers’ loans.

By then, Frances no longer owned any rental property, was behind on eight credit-card bills, had been late on several mortgage payments and had monthly income from Social Security of $761.

But in its paperwork, Ameriquest listed her occupation as landlord. It also used altered tax returns that whited out her business losses. Ameriquest lent her $324,000. It charged her more than $19,000 in fees and added an $8,424 penalty if she paid off the adjustable note within three years.

Diane Haugsvar of Seattle notarized the loan papers. She said she still can see Frances sitting at her dining-room table, nodding and saying “OK, OK,” in a singsong voice as she signed the documents. She remembered Frances, and her house, because the situation seemed chaotic.

Haugsvar noticed clutter everywhere, and much of it seemed to belong to Dash. She remembers thinking: He’s supposed to be taking care of her, yet he’s making it worse.

She didn’t think the situation rose to the level of a 911 call, but she now wishes she had called someone to investigate.

Frances’ new mortgage payment was $2,047, nearly three times her monthly Social Security check.

She missed the first five payments, and Ameriquest filed to foreclose. Dash said he broke the news to her.

She replied, “Not my house, not my house.”

Now Frances is bankrupt and lives in a nursing home. Her bankruptcy lawyer is trying to argue that she was not mentally sound when she signed the mortgage papers. 12 days ago, says the Seattle Times, a federal bankruptcy court judge approved a settlement: Frances’ home will be sold for $420,000 and non-defunct Ameriquest will get half.

The Times says Frances, whose illness has progressed so far that she isn’t even aware that she’s in debt, has ” a mailbox full of offers for new mortgages and credit cards.”

The fleecing of Frances Taylor [Seattle Times](Thanks, jp!)

PREVIOUSLY: Ameriquest Is Dead
$325 Million Amerquest Settlement Payout Might Average $812.15 Per Person
Ameriquest Employees Confess: Lying To Customers, Forging Papers