Nearly a year after Ameriquest settled to pony up $325 million in a agreement with 49 states and the District of Columbia to clean up mortgage lending practices, it opened a website to administer the plan.
And according to the new website, AmeriquestMultistateSettlement.com it will be more than a full year since the settlement that the company actually begins to disburse funds.
At a total $325 million, the second largest state or federal mortgage consumer protection agreement in history (after the 2002 $484 million accord between most states and Household Finance Corp.), the accord requires a $295 million settlement fund to provide restitution payments to eligible Ameriquest borrowers who received a first or second mortgage or both from the company between January 1, 1999 and December 31, 2005.
Without acknowledging any wrongdoing, Ameriquest agreed to the settlement following investigations, court suits and other actions in every state but Virginia into the company's practices federal and state investigators deemed predatory.
Predatory lending is a malignant outgrowth of the otherwise useful subprime residential mortgage sector. Subprime loans are generally more expensive than prime loans, but they are intended for borrowers who pose a greater risk to lenders, typically because of the lack of credit or previous credit problems. Without the subprime segment, some borrowers would be locked out of the American Dream.
Unfortunately, in numerous documented class action suits, state-filed cases and other claims, too many subprime loans became predatory with exorbitantly high costs, penalties and other financially abusive features often directed at specific groups, including minorities, older, low-income borrowers and others who can least afford the added cost.
The website advises consumers who are eligible to be on the lookout for a letter in early 2007 explaining the minimum restitution amount, but consumers can also call a toll-free number, 1-800-420-5875, with questions, especially if they don't get a letter and believe they qualify for restitution. You may also email the settlement administrator at This email address is being protected from spambots. You need JavaScript enabled to view it..
The letter comes with a release form you'll have to sign to receive your payment and Ameriquest advises that you seek legal help should you believe the amount incorrect before your accept it. Once you sign the release form you loose further rights to restitution. You will however, return rights to claims you've filed because you had to file foreclosure.
The case, involving the nation's largest subprime lender and the nation’s largest privately-held mortgage company, has had far-reaching implications. Earlier this year, it complicated the Senate confirmation of Ameriquest founder and chief stockholder Roland Arnall, who President Bush nominated to be Ambassador to the Netherlands. Arnall has been one of President Bush's major campaign donors.
Nearly one in three, or 240,000 of Ameriquest’s approximately 750,000 customers from 1999 to 2005 will receive restitution, according to government officials from the state of Connecticut.
