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TRENTON
– Attorney General Anne Milgram announced
today that approximately 14,000 Ameriquest
Mortgage Company consumers in New Jersey
are eligible to receive a total of $11.7
million in restitution from Ameriquest and
its related companies as part of a national
settlement that resolves allegations of
predatory lending.
Milgram said her office and the state Department
of Banking and Insurance began sending letters
and claim forms to eligible New Jersey consumers
earlier this week. To participate in the
settlement and receive restitution, eligible
consumers must mail completed and signed
forms to the Settlement Administrator by
September 10, 2007.
“Eligible
New Jersey consumers who borrowed from Ameriquest
and were impacted by questionable business
practices – practices that have been
eliminated or modified as a result of this
agreement – are now closer to receiving
restitution if they are participating in
the settlement,” said Milgram.
“We
take the threat of predatory lending very
seriously, and we are pleased that through
this cooperative effort we were able to
recover funds for consumers who were victimized
in this instance,” said Department
of Banking and Insurance Commissioner Steven
M. Goldman. “We remain vigilant in
our efforts to prevent this conduct, and
we urge any consumer who believes they may
have been subjected to predatory practices
to contact us with their concerns.”
The forms mailed to each Ameriquest consumer
will indicate the minimum payment the consumer
can expect to receive. However, the exact
amount could be larger, depending on how
many eligible Ameriquest customers in New
Jersey elect to participate in the settlement.
Attorney General Milgram encouraged eligible
consumers to review the claim forms and
information they receive, and to submit
a reply as soon as possible.
Milgram noted, however, that consumers who
opt to receive restitution payments relinquish
their right to file lawsuits against Ameriquest
related to loans covered by the settlement.
For that reason, she said, consumers may
want to consider consulting with a private
attorney or, if they qualify, a legal services
attorney before deciding whether to participate
in the settlement. (Consumers who participate
in the settlement do not, however, give
up any claim they may otherwise raise if
their home goes into foreclosure.)
Under
the settlement agreement, more than 481,000
borrowers who were customers of Ameriquest
Mortgage Company, Town and Country Credit
Corporation and AMC Mortgage Services, Inc.
(formerly known as Bedford Home Loans) between
January 1, 1999 and December 31, 2005 are
eligible to receive restitution payments.
Restitution payments nationwide are expected
to total more than $300 million.
Consumers can obtain detailed information
about the settlement and their eligibility
for restitution by going to the Settlement
Administrator’s Web site: www.ameriquestmultistatesettlement.com.
Consumers may also contact the Settlement
Administrator at 800-420-5875 (persons with
hearing-related disabilities may call 866-494-8274.)
The Ameriquest settlement resolves allegations
of predatory lending practices by Attorneys
General and banking and finance regulators
in New Jersey and every other state except
Virginia (where Ameriquest did not do business),
as well as the District of Columbia.
Among other things, Ameriquest and the affiliate
companies allegedly misrepresented and did
not adequately disclose the terms of home
loans, charged excessive loan origination
fees and prepayment penalties, refinanced
borrowers into improper or inappropriate
loans, and improperly inflated appraisals
used to qualify borrowers for loans.
The total $300-million-plus settlement payment
by Ameriquest ranks as the second-largest
state or federal consumer protection settlement
in history, after the $484 million predatory
lending agreement reached in 2002 between
most states, including New Jersey, and the
Household Finance Corporation.
Ameriquest primarily makes refinancing loans
to existing homeowners who are hoping to
consolidate credit card and other debt into
their new home mortgages and realize overall
monthly savings. Borrowers who do not have
the best credit rating may turn to sub-prime
loans, which often have higher interest
rates and other costs attached. Based in
Orange, California, Ameriquest Mortgage
is a subsidiary of the ACC Capital Holding
Corporation. ACC was also party to the settlement
agreement along with the subsidiary companies
Town and Country Credit and AMC Mortgage.
Deputy Attorney General Sharon Young of
the Division of Law’s Banking and
Insurance Section and Deputy Attorney General
Brian Brennan of the Division of Law’s
Consumer Fraud Protection Section handled
the matter on behalf of the state.
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