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For Immediate Release:  
For Further Information:
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October 5, 2006  
Lee Moore
609-292-4791

Office of The Attorney General
- Stuart Rabner, Attorney General

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Attorney General Announces Ameriquest Settlement Information

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TRENTON – Attorney General Stuart Rabner announced today that a special Web site and toll-free telephone number are now available to provide information to Ameriquest Mortgage Company consumers who may be entitled to restitution as a result of the company’s $325 million settlement with New Jersey and other states.

The Web site is www.AmeriQuestMultiStateSettlement.com, and the toll-free number is 1-800-420-5875. As many as 15,000 New Jersey borrowers may be eligible for restitution.

New Jersey entered into a multi-state settlement agreement with Ameriquest, the nation’s largest sub-prime lender, earlier this year. The settlement followed an investigation by state consumer protection agencies, banking regulators and local prosecutors into alleged improper business practices. Law enforcement officials and banking regulators began their investigation after receiving hundreds of complaints from Ameriquest customers in New Jersey and throughout the United States.

The alleged practices included: inadequate disclosure of prepayment penalties, discount points and other loan terms; unsolicited refinancing offers that did not adequately disclose prepayment penalties; improperly influenced and inflated appraisals and encouraging borrowers to lie about income or employment to obtain loans.

Ameriquest denied all allegations by the states, but has agreed to pay restitution to customers in New Jersey and across the nation, and to eliminate allegedly predatory lending practices.

“This was an important settlement agreement for thousands of New Jerseyans,” Attorney General Rabner said.

“Consumers – often borrowing large sums of money – were impacted by questionable business practices that, as a result of this settlement agreement, have been eliminated or modified. Under this agreement, Ameriquest must now provide full and complete disclosure to customers so they know all costs involved in obtaining a mortgage, their financial obligations over the life of the mortgage, and other critical information.”

“Ameriquest consumers in New Jersey need not take any action at this stage,” Rabner added. “Each state will determine which customers in its jurisdiction are eligible to receive money from the restitution funds, and our expectation is to begin notifying those customers in early 2007. In the meantime, the toll-free number and special Web site can provide useful information regarding the settlement agreement.”

Steven M. Goldman, commissioner of the New Jersey Department of Banking and Insurance, said, “Lenders have a responsibility to potential borrowers to be fair and honest
in explaining the terms of a loan in order to help that consumer to realistically assess his or her capacity to repay a mortgage.

"In this instance,” Goldman added, “ thousands of borrowers may have been harmed by the actions of a company that failed in this responsibility. Hopefully this settlement -- including its provisions requiring ready access to information on claims -- will help identify those consumers who were harmed and help to make them whole.”

The total $325 million 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 and the Household Finance Corporation.

Under the settlement agreement, Ameriquest will pay a total of $295 million for consumer restitution. Of that amount, $175 million will be distributed in a nationwide claims process to eligible Ameriquest customers who obtained mortgages from January 1, 1999 through April 1, 2003. Another $120 million in restitution will be allocated to the participating states based on the percentage of total Ameriquest loans held by consumers in each state, and will be used to compensate Ameriquest customers who obtained mortgages between January 1, 1999 and December 31, 2005.

In addition to agreeing to provide restitution, Ameriquest has also agreed to pay a total of $30 million to states participating in the settlement to help cover the cost of the Ameriquest investigation, future mortgage-related consumer awareness programs and enforcement efforts.

While impacted consumers in New Jersey and across the nation are expected to receive restitution eligibility notifications in early 2007, the Web site and toll-free telephone number have been made available as part of an effort by the States -- working in conjunction with an appointed national settlement administrator – to assist Ameriquest customers seeking to learn about the settlement, and to have their questions answered.

The Web site provides access to a complete copy of the Ameriquest settlement agreement, information on who may be eligible to receive restitution payments, and answers to a variety of frequently asked questions. It also provides visitors a mechanism for directly e-mailing the nationwide settlement administrator.

Between 1999 and 2005, Ameriquest issued loans in New Jersey in excess of $4 billion. It is estimated that between 14,000 and 15,000 New Jersey borrowers may be eligible for restitution. The actual dollar amounts available to individual consumers has not been determined, and will hinge on the facts of individual borrower's cases.

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 its other subsidiaries including Town and Country Credit Corporation and AMC Mortgage Services, Inc., formerly known as Bedford Home Loans.

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 ratings may turn to sub-prime loans, which often have higher interest rates and other costs attached.

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