Ameriquest Mortgage
| File:Ameriquest logo.jpg | |
| Industry | Investment services |
|---|---|
| Founded | 1979, in Orange County, California, U.S. |
| Founder | Roland Arnall |
| Defunct | 2007 |
| Fate | Chapter 11 liquidation |
| Successor | |
| Headquarters | Los Angeles, California United States |
Area served | United States |
| Products | |
Number of employees | 2,000 (2007) |
| Website | Ameriquest Mortgage |
Ameriquest ranked as one of the largest subprime mortgage lenders in the United States until it ceased operations in 2007. The firm was among the pioneers in implementing automated credit evaluation systems to speed up loan approvals but was accused by U.S. regulators of engaging in predatory lending. Its aggressive use of stated income loans, which permitted borrowers to report earnings without verification, played a major role in both the subprime mortgage meltdown and the company's downfall.
The company achieved widespread visibility through extensive advertising campaigns, including television commercials, blimps flying over prominent sports arenas, and sponsorship deals with major events such as the Rolling Stones tours, the halftime show of Super Bowl XXXIX, and various NASCAR drivers.
History
Established in 1979 by business leader Roland Arnall in Orange County, California, Ameriquest initially operated as Long Beach Savings & Loan. The company moved its headquarters to Long Beach, California and transitioned into a mortgage lender by 1994, adopting the name Long Beach Mortgage Co. In 1997, its independent broker funding unit was separated into a publicly traded entity that was later acquired by Washington Mutual in 1999.
Arnall restructured Long Beach Savings & Loan into three branches under his private holding company ACC Capital Holdings: Ameriquest Mortgage Company focusing on retail lending, Argent Mortgage handling wholesale lending, and AMC Mortgage Services managing loan servicing.
By 2004, Ameriquest was originating more than $50 billion annually in subprime home loans. On September 1, 2007, Citigroup purchased Argent Mortgage along with AMC Mortgage Services, which resulted in the shutdown of Ameriquest Mortgage.
Predatory lending allegation
In 1996, Ameriquest agreed to contribute $3 million to an educational fund as part of resolving a Department of Justice lawsuit accusing it of predatory lending practices targeting elderly, female, and minority borrowers. Authorities alleged that brokers and staff imposed additional fees up to 12 percent on these groups. The settlement required Ameriquest to provide employee training on ethical mortgage practices and avoidance of predatory tactics; however, this commitment was limited to operations within California.
Following an investigation by the Federal Trade Commission in 2001, Ameriquest reached an agreement with ACORN to provide $360 million in affordable loans.
A February 2005 report by the Los Angeles Times uncovered questionable sales methods at Ameriquest including misleading borrowers about loan conditions, forging signatures, manipulating appraisals, and fabricating income documentation to qualify clients for loans beyond their means.
On August 1, 2005, the company allocated $325 million to resolve investigations led by attorneys general from 30 states concerning allegations of concealed fees and balloon payment schemes. Prior settlements involving multimillion-dollar payouts had already been finalized in states such as California, Connecticut, Georgia, Massachusetts, and Florida. Brian Montgomery, Federal Housing Administration commissioner at the time, voiced concerns about exploitation through subprime lending.
On June 13, 2007, attorneys representing borrowers claimed in court that Ameriquest entities transferred assets to Arnall with the intent of obstructing plaintiffs involved in a class-action suit.
Former staff members reported pressure to falsify documentation related to poor-quality mortgages sold to Wall Street investors seeking rapid returns. This type of mortgage fraud is widely regarded as a central contributor to the financial crisis of 2008.
See also
External links
- Mortgage lenders of the United States
- American companies established in 1979
- Financial services companies established in 1979
- Financial services companies disestablished in 2007
- Defunct companies based in California
- 1979 establishments in California
- 2007 disestablishments in California
- Subprime mortgage lenders
- Subprime mortgage crisis
- Companies that filed for Chapter 11 bankruptcy in 2007
- Companies of the United States by year of establishment