Attorneys general hail Ameriquest settlement

LOS ANGELES — State prosecutors on Monday hailed a $325 million settlement with lending giant Ameriquest, saying the deal will give some 725,000 borrowers in 49 states a chance at recovering some money lost due to what they described as deceptive lending practices.

“We found that Ameriquest’s lending practices too often violated principles of fairness,” said California Attorney General Bill Lockyer. “This settlement provides a good measure of justice by compensating victims for previous practices and to see there aren’t problems in the future.”

The states began investigating the Orange, Calif.-based company, which lends to people with poor credit, more than two years ago after receiving complaints from tens of thousands of consumers who claimed they were paying more for their loans than they bargained for.

The states have alleged that the company’s business practices were deceptive, leaving some borrowers saddled with extra fees or higher mortgage rates.

There was “strong, strong pressure in the compensation system and in the quota system and from the branch and retail managers to sell, sell, sell,” said Iowa Attorney General Tom Miller, who led the states’ effort. “This produced, we think, significant problems for consumers.”

The agreement, first revealed Friday, is the second-largest consumer protection settlement reached by a state or the federal government, the state officials said. The largest was for $484 million, obtained by a group of states in 2002 from Household Finance Corp.

The settlement covers ACC Capital Holdings Corp., Ameriquest Mortgage Co.’s holding company, and also applies to subsidiaries Town & Country Credit Corp. and AMC Mortgage Services Inc., formerly Bedford Home Loans.

The lender did not admit to any wrongdoing as part of the deal, but agreed to reform several of its business practices.