Title: Ameriquest, The Subprime Meltdown, Roland Arnall, And Political Connections Source:
[None] URL Source:[None] Published:Oct 7, 2008 Author:nolu chan Post Date:2008-10-07 03:22:42 by nolu chan Keywords:None Views:850 Comments:1
Ameriquest, The Subprime Meltdown, Roland Arnall, And Political Connections
Ameriquest Investigation
From: jameshoyer
Added: October 15, 2007
5m:36s
On January 16, 2005USA Today reported that Ameriquest Capital Corporation, Orange, Calif. was one of 53 companies to donate the maximum $250,000 toward the inauguration of President Bush for his second term. [1]
On February 4, 2005 the Los Angeles Times ran a lengthy article on Ameriquest, Workers Say Lender Ran 'Boiler Rooms'.. [2]
[excerpts]
"It was like a boiler room," said Bomchill, 37. "You produce, you make a lot of money. Or you move on. There's no real compassion or understanding of the position they're putting their customers in. ...
Ameriquest, however, has been held up as an industry model since agreeing in 2000 to establish a fund for needy borrowers and to adhere to a list of "best practices." The company says it holds itself "to the highest standards" and does not tolerate unethical or improper behavior by its employees. ...
Recent lawsuits filed by consumers in California and at least 20 other states allege a pattern of fraud, falsification of documents, bait-and-switch sales tactics and other violations. Six of these suits seek class-action status to represent large groups of borrowers; such status has been granted for a 2001 suit filed in Redwood City, Calif. In a sworn declaration in that case, a former loan officer named Kenneth Kendall said Ameriquest managers encouraged employees to "promise certain interest rates and fees, only to change those rates at the time of the closing." ...
Ameriquest is among the largest political donors in California, spending $3.8 million in the 2003-04 election cycle on state candidates and ballot measures. Schwarzenegger was the largest benefactor, picking up $1.18 million of the company's money for his various campaign bank accounts, among them his reelection committee and one he uses to promote ballot measures. ...
Several former loan officers said employees frequently abused the company's "stated income" loan program, which requires only a letter from the borrower declaring how much he or she makes. Borrowers were told what their income had to be to qualify, these ex-workers said, and they were often coached to invent fictitious side jobs, such as home-based computer consulting, to hit the mark.
Nearly one out of every six Ameriquest mortgages sold to Wall Street investors in 2004 was a stated-income loan, according to a Times analysis of 90,000 Ameriquest mortgages listed in filings with the Securities and Exchange Commission.
Many of the ex-employees likened Ameriquest's culture to the rough-and-tumble world of "Boiler Room," a 2000 movie about fast-talking, young stock swindlers who revel in their powers of anything-goes salesmanship.
The comparison is more than happenstance: "That was your homework -- to watch 'Boiler Room,' " Taylor said. Managers and employees passed around the film to keep themselves fired up, she and others explained. Kendall, in a sworn declaration in the Redwood City class-action case, said that watching "Boiler Room" was part of his Ameriquest training.
It was all about "the energy, the impact, the driving, the hustling," Taylor said.
Bomchill, who worked as a loan officer in the Minneapolis suburb of Plymouth in 2002 and 2003, said Ameriquest managers often discouraged questionable practices -- but with a wink: "It was kind of ... see no evil, hear no evil."
Three other former workers at the branch said Bomchill's description was accurate.
On July 25, 2005 the Washington Post[3] reported that Roland E. Arnall, the California billionaire owner of ACC Capital Holdings, the parent company of Ameriquest, was nominated by President George W. Bush to be the United States Ambassador to the Netherlands.
At the same time, it was reported that "Arnall's company, Ameriquest Mortgage Co., is being investigated by regulators in 30 states. A $325 million settlement would be one of the largest ever in a predatory lending case."
On January 23, 2006 the Phoenix Business Journal reported that Ameriquest Mortgage Company reached a settlement and agreed to pay $325M to consumers without admitting wrongdoing. [4]
On September 1, 2007, Reuters, reported Ameriquest closes, Citigroup buys mortgage assets. [5]
Ameriquest Mortgage Co, the largest U.S. subprime lender as recently as 2005, is closing, the latest home loan provider to shut down amid the nation's housing market slump. ...
U.S. President George W. Bush said on Friday the government would try to keep some borrowers from defaulting, but would not bail out lenders.
Trouble in the subprime mortgage market has spread to other debt markets, including loans used to finance leveraged buyouts, creating big headaches for many commercial and investment banks.
Update of October 8, 2007: October's Mortgage Servicing News reports that "Citigroup has acquired the $45 billion subprime servicing portfolio of Ameriquest Mortgage, a transaction that will help it challenge Countrywide Financial Corp. for the No. 1 spot among B&C servicers... Citigroup also purchased Argent Mortgage, a nonprime wholesale lender that is a sister company to Ameriquest... By purchasing the Ameriquest receivables, Citigroup will grow its subprime servicing portfolio to about $110 billion. At the end of June, CFC serviced $125.6 billion in subprime, ranking first in that niche... 'Exercising our option to acquire the assets from ACH's wholesale origination and servicing business allows Citi to secure valuable and scalable platforms in a market undergoing significant change,' said Jeffrey Perlowitz, head of global securitized markets for Citi's fixed income, currencies and commodities division, where the assets will reside."
But why would Argent's origination capacity "reside" in Citigroup's investment bank? We'll have more on this.
- - -
Update of December 17, 2007: Too little, too late -- nearly two years after the Ameriquest settlement was announced with fanfare by state attorneys general, now the relatively small payments are being made. This is for loans from 1999 to 2005: that is, up to seven years ago. In New Jersey, for example, 9,132 borrowers will receive a total of $12.2 million, according to Lee Moore of the New Jersey Office of the Attorney General. The total awarded in Pennsylvania was $10.8 million to 12,401 borrowers. You do the math...
- - -
Update of March 10, 2008: The ACJ notes that in September, Citigroup bought the assets of the mortgage servicing company owned by Ameriquest's parent, ACC Capital Holdings. It also bought the assets of Argent Mortgage. That deal gave Citigroup the servicing rights for the Andronicas' mortgage and $45 billion in other loans... A Citigroup spokeswoman said Friday that the lender was awaiting information from the Andronicas to "determine their eligibility for a modification." Kelly and David Andronica think Citigroup should make things right, especially since the problems with Ameriquest loans were well known when Citigroup decided to buy the Ameriquest servicing company.
With the pressure on, Arnall's company agreed early in 2006 to a $325 million settlement with the states. Within a few weeks, the Senate blessed Arnall's nomination, clearing the way for the self-made billionaire to pack his bags for the Netherlands.
The settlement was hailed as a significant victory for consumers. But as it turns out, it did very little to ease the huge financial hit experienced by thousands of Americans still trapped in Ameriquest loans.
The settlement offered Ameriquest homeowners a token payment. For Georgians who qualified and agreed not to sue the mortgage company, checks that averaged $1,000 began arriving late last year, as the mortgage meltdown was forcing thousands into foreclosure.
For homeowners stuck with fraudulent Ameriquest mortgages, the government's settlement offered no revision of the terms of the loans.
Consumer advocates say that Ameriquest customers at risk of foreclosure have great difficulty winning modifications to their mortgages now, even though the Bush administration has encouraged lenders to make reasonable changes to keep families in their homes. Federal Reserve Chairman Ben Bernanke last week called on lenders to cut the balance due on mortgages that exceed the value of homes, a common problem for consumers who borrowed from Ameriquest.
Gary Leshaw, a Decatur consumer attorney who has contested Ameriquest mortgages, said the much-heralded settlement was a failure.
"They sent the victims a few dollars, but they're still stuck with their fraudulently made loans," he said. "And the guy in charge is now an ambassador."
Arnall resigned as ambassador on March 7, 2008, and died shortly thereafter on March 17, 2008. According to Wiki "Many believe that Arnall faked his own death, in order to avoid investigation and imprisonment by the FBI for his involvement in a litany of mortgage fraud cases. A naturalized Israeli citizen, he may have fled to Israel to escape any possibility of prosecution."
Roland Arnall: Rapist, Murderer, Ambassador
From: alabamaredskin
Added: December 11, 2007
9m:31s
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[1]USA Today, January 16, 2005, Financing the inauguration.
[2]Los Angeles Times, February 4, 2005 , Workers Say Lender Ran 'Boiler Rooms', Critics say Ameriquest, touted as an industry model, fabricated data, forged documents and hid fees, The company denies wrongdoing., by Mike Hudson and E. Scott Reckard, Special to The Times
[3]Washington Post, Friday, July 29, 2005; Page D01, Bush Picks Ameriquest Owner as Ambassador, Firm's Lending Tactics Investigated, by Kirstin Downey, Washington Post Staff Writer
[4]Phoenix Business Journal January 23, 2006, AGs, Ameriquest reach $325M predatory lending settlement.
[5]Reuters, September 1, 2007, Ameriquest closes, Citigroup buys mortgage assets, by Jonathan Stempel
[7]Atlanta Journal Constitution, March 9, 2008, Many homeowners still trapped in Ameriquest loans, Foreclosure possible even for those with fraudulent mortgage terms, by Carrie Teegarden.
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#1. To: nolu chan, Uma Guerilla, _'+?@!, Brian S, Arator, Starwind, Peetie Wheatstraw, aristeides, Mekons5, nomorecrap08, ghostcommander, atheo, Peo111, Red Jones, Itisalmosttoolate (#0)
Fascinating info, great post and research. I am acquainted with former Ameriquest employees - there were so many who needed to find a new employer in CA - and it was not easy at the time; probably worse now.
"but really, what does it say about your judgment when you think George Bush has been right more than ninety percent of the time?" - Senator Barack Obama on Senator John McCain
