Under this agreement, Ameriquest is alleged to have engaged in the following
practices:
High-pressure sales tactics.
Ameriquest maintained a high-pressure sales
environment in their retail branches and a sharply skewed commission structure
which rewarded employees producing a high monthly volume of loans.
Disparaging Disclosures.
The Act, as well as Federal law, requires that homeowners receive both a Truth
in Lending Act (TILA) disclosure featuring the annual percentage rate of the
proposed loan and a Good Faith Estimate of the costs of the loan, as required
by the Real Estate Settlement Procedures Act (RESPA). Ameriquest
account executives regularly told homeowners that they should ignore the
TILA/RESPA disclosures and that these disclosures were not representative of
the actual loan terms they would receive, or would otherwise belittle the
accuracy and relevance of the TILA/RESPA disclosures.
Interest Rate/Discount Points.
Ameriquest trained its employees, formally and informally,
to hide critical loan terms until the borrower was emotionally and financially
committed to the loan. Account executives told customers that Ameriquest offered some of the best or lowest rates in the
industry and that the borrowers would receive the best or lowest rate for which
they qualified, while charging interest rates higher than the market rates of
the industry, charging discount points which did not decrease the interest rate
being charged, and training its sales force to avoid telling borrowers the
actual interest rates and costs of the loans.
Fabricated Borrower Income.
Ameriquest engaged in a pattern of encouraging and
facilitating borrower fabrication of non-existent occupations, income sources
or amounts of income to support loan applications. These loan applications
generally involved “stated income” loans.
Fraudulently Inflated Appraisals.
Ameriquest account executives engaged in a pattern of
obtaining appraisals that they knew, or should have known, were substantially
in excess of the market value of the homes securing Ameriquest
loans.
Prepayment Penalties.
A prepayment penalty is a fee charged by a lender if the borrower pays the loan
off early, generally to make up for interest the lender anticipates earning but
will not earn as a result of the payoff of the loan. Ameriquest
account executives engaged in a pattern of deceptive practices relating to the
explanation, disclosure, and inclusion of prepayment penalties.
Rushed Closings.
Ameriquest rushed consumers to the closing of the
loan. Some loans are closed within days of the account executive taking the
loan application over the phone. Homeowners have been told that it is important
to hurry and close the loan. Some homeowners have been told that the loan terms
may not be available if the loan does not close by the end of the month. Loans
usually are closed by Ameriquest employees or agents,
not by independent loan closers.
Untimely Funding.
Ameriquest has regularly closed loans before the
company has all the information necessary to ensure that the loan is eligible
for funding in its securitization program. In particular, Ameriquest
has closed loans before it has completed the appraisal of the property. In some
cases, despite the fact that homeowners have completed a closing, Ameriquest has reneged on its obligation to fund the loan.