Ameriquest Settlement: "Don't Judge Too Quickly"
Ameriquest says, "Don't Judge Too Quickly". I say, "Don't Forget So Easily"
I may seem to be going on a bit with another article about the Ameriquest scandal and judgment, but I simply couldn't ignore their new series of television ads. I should mention that the settlement was actually for ACC Capital Holdings, the holding company for three retail subsidiaries, Ameriquest Mortgage Co., Town and Country Credit Corp. and AMC Mortgage Services Inc. Less than a month after making an out of court settlement for $295 million dollars plus $30 million in attorneys fees, Ameriquest's marketing machine was back in force, with a series of commercials that seemed to be aimed at damage control. One showed a woman on an airliner stumbling due to turbulence, and accidentally winding up straddling a stranger, with her blouse also "accidentally" unbuttoned. There are no spoken words, just gasps and looks of discomfort from her fellow passengers as the lights suddenly come up. Another shows a doctor zapping a fly, and holding the paddles over the unconscious patient as his family walks in. He says "That killed him". The tag line on both is "Don't Judge too Quickly ... We Won't", followed by the Ameriquest logo. The more recent ones are simply a short, 15 second spot of the tag line "Don't Judge Too Quickly", followed by the logo.
In a recent article in the Washington Post by Kenneth R. Harney, titled "Don't Believe It Unless It's in Writing", he asks a series of questions;
"Did your loan officer sit you down and walk you through all the key operational details of your most recent mortgage before you signed?
Did you see a copy of the appraisal and have a chance to review it carefully?
Did you understand when, if ever, a prepayment penalty might take effect to discourage you from refinancing? Or was that whole subject left a little fuzzy?
Did you receive a copy of your loan and settlement cost good-faith estimates within three business days of application?
These may sound like the most basic of questions and you may well answer: Duh! Of course I understood everything I needed to, and yes, my loan officer was an absolute font of useful information.
But the recent $325 million multi-state legal settlement involving Ameriquest Mortgage Co. suggests that not all is well on the home loan front, and that even experienced buyers and refinancers need to question more, review more, probe more before committing to what is often the biggest debt burden of their lives."
And Mr. Harney is right. Not only are these the most basic of questions, but are all matters that are covered by law. Laws that set standards that all brokers and lenders are supposed to adhere to. Standards which the president of Ameriquest, billionaire Roland E. Arnall, has admitted publicly that they did not always manage to comply with.
The task force formed to investigate Ameriquest has never specified the allegations made against Ameriquest in 49 states and the District of Columbia, but Arnall disclosed the information in writing to the Senate committee as it considered his nomination by president Bush to the position of ambassador to the Netherlands. According to Arnall's written testimony, the attorneys general alleged that the company had pressured appraisers to inflate property values so borrowers could get bigger loans, charged upfront fees without reducing interest rates as promised, and told borrowers to ignore written information about interest rates because they would give them lower rates later. The company then is alleged to have given them the higher interest rates instead. Ameriquest is also alleged to have assured borrowers their loans would have no prepayment penalties, then inserted such payments into the final loan documents; delayed the time period between the loan closing and the funding; and misrepresented fees and costs. At the November Senate hearing, months before the settlement agreement, Arnall stated that Ameriquest had not handled its dealings with customers "perfectly" and that some employees had been fired.
But according to Connecticut Attorney General Richard Blumenthal, who said he could not discuss any specifics about the negotiations before the settlement had been reached, (and was bound by the agreement afterward), many consumers had been badly taken advantage of in their dealings with Ameriquest.
"What we've seen in human terms is catastrophic damage for some individuals who were misled or deceived or who received loans greater than they could possibly afford because of inflated income levels or appraisals resulting from employee misconduct," Blumenthal stated "We're taking action that will be designed to stop these abuses and effectively scrutinize and monitor these systems going forward. The abuses are systemic in number and nature."
Others sanctions imposed on Ameriquest are specifically designed to hamper them and their other lending groups from violating legal and ethical practices in the future. Still, nothing can be said about ACC Capital Holdings having really done anything wrong, by me or by anyone else. That also was part of the agreement. ACC Capital Holdings and Ameriquest admitted no wrongdoing, and their licenses to do business were not restricted in any way as part of the settlement. Now a total settlement of 325 million dollars might seem like a lot of money, and no one outside of the company appears to know exactly how much they profited from these suspect transactions. But, some estimates put the profit figures between 6 and 12 billion dollars ($6-12,000,000,000) off of those loans, which would make the settlement amount less than the sales tax rate in most states. Of course, Arnall has been President Bush's single largest campaign contributor since 2002, and he is Bush's candidate for ambasador to the Netherlands. He has also made large contributions to many Democrats, including U.S. Representative Tom Lantos (D-Calif.), who endorsed Arnall's nomination to become ambassador at the Senate hearing. So, there are those expenditures to consider, but in Mr. Arnall's case, it seems it was money well spent.
My problem with Ameriquest's new ad campaign is threefold. First and foremost, is the implication that any legal or ethical problems with their lending practices were strictly "accidental", and that firing a few low level employees have solved the problem. Both statements from past and current employees, as well as a somewhat guarded statement from the Connecticut Attorney General, seem to more than suggest otherwise. Although, of course, the terms of the settlement don't allow any definitive accusations.
Second, their campaign seems to imply that all brokers and lenders are using the same illegal and unethical practices they were accused of, so those practices are no reason to "judge" Ameriquest. After all, there was no legal statement of guilt on their part, or judgment of guilt by the court system, so they must be innocent. This implication hurts all of the small, independent brokers that adhere to not only legal, but also ethical practices, with every client they have the privilege to help. I've mentioned this before, and I can't help saying it again, sometimes bigger isn't better, or even cheaper. If you want real assistance with one of the biggest financial decisions of your life, try contacting a small, local Licensed Mortgage Broker.
Finally, I feel their failure to admit any guilt, pay all penalties and make restitution in full, and only resume business after carefully overhauling all of their procedures and practices is insulting. Not only to myself and all of the other conscientious brokers and lenders out there, but also to consumers that might be considering using them for a mortgage.
Yes, Ameriquest did pay back a small percentage of their profits in a settlement to some consumers, and they are under the gun from a committee that's supposed to insure that they don't promote any unethical practices in the near future. Still, their apparent lack of remorse and failure to fully compensate all consumers who were damaged by their practices, plus their "wink, wink ... nod, nod" attitude, makes them seem just a bit insincere. Ameriquest representatives say their commercials are referring to the fact that they don't judge consumers who have credit issues, but even their explanation refers to the idea that "anyone" can make a mistake. I'm not the only one who has a problem with their ads, including some of their past customers, and other editorials have pointed this out.
Luckily, it seems that, contrary to Ameriquest's hopes, maybe people don't forget that fast. Perhaps their ad campaign is a direct response to the fear that potential clients have been flocking away from them, and other large on-line lenders, in droves. Since ACC Capitol Holdiongs has 360 days to fund the settlement agreement, many consumers may have decided not to help them fund it with their money. When Ameriquest says "Don't Judge Too Quickly", it serves to point out Ameriquest's concerned that many people may think they were never properly judged at all, but simply "skated by" on political influence and financial clout.
The decision, of course, is yours. You can get a mortgage through a large corporation, be assigned a number (and perhaps get treated like one), and then fight to get what ever service you can, from a company that is being forced to comply with ethical practices. Or, you can contact a local Mortgage Broker who will treat you right, just because it's the right thing to do. They have access to all of the same loan programs, and really appreciate your business. They'll listen to your concerns, find the best program available for your needs, and you can start to develop a relationship that will last a lifetime. Especially in light of recent events, the choice seems pretty clear.
FMI
I may seem to be going on a bit with another article about the Ameriquest scandal and judgment, but I simply couldn't ignore their new series of television ads. I should mention that the settlement was actually for ACC Capital Holdings, the holding company for three retail subsidiaries, Ameriquest Mortgage Co., Town and Country Credit Corp. and AMC Mortgage Services Inc. Less than a month after making an out of court settlement for $295 million dollars plus $30 million in attorneys fees, Ameriquest's marketing machine was back in force, with a series of commercials that seemed to be aimed at damage control. One showed a woman on an airliner stumbling due to turbulence, and accidentally winding up straddling a stranger, with her blouse also "accidentally" unbuttoned. There are no spoken words, just gasps and looks of discomfort from her fellow passengers as the lights suddenly come up. Another shows a doctor zapping a fly, and holding the paddles over the unconscious patient as his family walks in. He says "That killed him". The tag line on both is "Don't Judge too Quickly ... We Won't", followed by the Ameriquest logo. The more recent ones are simply a short, 15 second spot of the tag line "Don't Judge Too Quickly", followed by the logo.
In a recent article in the Washington Post by Kenneth R. Harney, titled "Don't Believe It Unless It's in Writing", he asks a series of questions;
"Did your loan officer sit you down and walk you through all the key operational details of your most recent mortgage before you signed?
Did you see a copy of the appraisal and have a chance to review it carefully?
Did you understand when, if ever, a prepayment penalty might take effect to discourage you from refinancing? Or was that whole subject left a little fuzzy?
Did you receive a copy of your loan and settlement cost good-faith estimates within three business days of application?
These may sound like the most basic of questions and you may well answer: Duh! Of course I understood everything I needed to, and yes, my loan officer was an absolute font of useful information.
But the recent $325 million multi-state legal settlement involving Ameriquest Mortgage Co. suggests that not all is well on the home loan front, and that even experienced buyers and refinancers need to question more, review more, probe more before committing to what is often the biggest debt burden of their lives."
And Mr. Harney is right. Not only are these the most basic of questions, but are all matters that are covered by law. Laws that set standards that all brokers and lenders are supposed to adhere to. Standards which the president of Ameriquest, billionaire Roland E. Arnall, has admitted publicly that they did not always manage to comply with.
The task force formed to investigate Ameriquest has never specified the allegations made against Ameriquest in 49 states and the District of Columbia, but Arnall disclosed the information in writing to the Senate committee as it considered his nomination by president Bush to the position of ambassador to the Netherlands. According to Arnall's written testimony, the attorneys general alleged that the company had pressured appraisers to inflate property values so borrowers could get bigger loans, charged upfront fees without reducing interest rates as promised, and told borrowers to ignore written information about interest rates because they would give them lower rates later. The company then is alleged to have given them the higher interest rates instead. Ameriquest is also alleged to have assured borrowers their loans would have no prepayment penalties, then inserted such payments into the final loan documents; delayed the time period between the loan closing and the funding; and misrepresented fees and costs. At the November Senate hearing, months before the settlement agreement, Arnall stated that Ameriquest had not handled its dealings with customers "perfectly" and that some employees had been fired.
But according to Connecticut Attorney General Richard Blumenthal, who said he could not discuss any specifics about the negotiations before the settlement had been reached, (and was bound by the agreement afterward), many consumers had been badly taken advantage of in their dealings with Ameriquest.
"What we've seen in human terms is catastrophic damage for some individuals who were misled or deceived or who received loans greater than they could possibly afford because of inflated income levels or appraisals resulting from employee misconduct," Blumenthal stated "We're taking action that will be designed to stop these abuses and effectively scrutinize and monitor these systems going forward. The abuses are systemic in number and nature."
Others sanctions imposed on Ameriquest are specifically designed to hamper them and their other lending groups from violating legal and ethical practices in the future. Still, nothing can be said about ACC Capital Holdings having really done anything wrong, by me or by anyone else. That also was part of the agreement. ACC Capital Holdings and Ameriquest admitted no wrongdoing, and their licenses to do business were not restricted in any way as part of the settlement. Now a total settlement of 325 million dollars might seem like a lot of money, and no one outside of the company appears to know exactly how much they profited from these suspect transactions. But, some estimates put the profit figures between 6 and 12 billion dollars ($6-12,000,000,000) off of those loans, which would make the settlement amount less than the sales tax rate in most states. Of course, Arnall has been President Bush's single largest campaign contributor since 2002, and he is Bush's candidate for ambasador to the Netherlands. He has also made large contributions to many Democrats, including U.S. Representative Tom Lantos (D-Calif.), who endorsed Arnall's nomination to become ambassador at the Senate hearing. So, there are those expenditures to consider, but in Mr. Arnall's case, it seems it was money well spent.
My problem with Ameriquest's new ad campaign is threefold. First and foremost, is the implication that any legal or ethical problems with their lending practices were strictly "accidental", and that firing a few low level employees have solved the problem. Both statements from past and current employees, as well as a somewhat guarded statement from the Connecticut Attorney General, seem to more than suggest otherwise. Although, of course, the terms of the settlement don't allow any definitive accusations.
Second, their campaign seems to imply that all brokers and lenders are using the same illegal and unethical practices they were accused of, so those practices are no reason to "judge" Ameriquest. After all, there was no legal statement of guilt on their part, or judgment of guilt by the court system, so they must be innocent. This implication hurts all of the small, independent brokers that adhere to not only legal, but also ethical practices, with every client they have the privilege to help. I've mentioned this before, and I can't help saying it again, sometimes bigger isn't better, or even cheaper. If you want real assistance with one of the biggest financial decisions of your life, try contacting a small, local Licensed Mortgage Broker.
Finally, I feel their failure to admit any guilt, pay all penalties and make restitution in full, and only resume business after carefully overhauling all of their procedures and practices is insulting. Not only to myself and all of the other conscientious brokers and lenders out there, but also to consumers that might be considering using them for a mortgage.
Yes, Ameriquest did pay back a small percentage of their profits in a settlement to some consumers, and they are under the gun from a committee that's supposed to insure that they don't promote any unethical practices in the near future. Still, their apparent lack of remorse and failure to fully compensate all consumers who were damaged by their practices, plus their "wink, wink ... nod, nod" attitude, makes them seem just a bit insincere. Ameriquest representatives say their commercials are referring to the fact that they don't judge consumers who have credit issues, but even their explanation refers to the idea that "anyone" can make a mistake. I'm not the only one who has a problem with their ads, including some of their past customers, and other editorials have pointed this out.
Luckily, it seems that, contrary to Ameriquest's hopes, maybe people don't forget that fast. Perhaps their ad campaign is a direct response to the fear that potential clients have been flocking away from them, and other large on-line lenders, in droves. Since ACC Capitol Holdiongs has 360 days to fund the settlement agreement, many consumers may have decided not to help them fund it with their money. When Ameriquest says "Don't Judge Too Quickly", it serves to point out Ameriquest's concerned that many people may think they were never properly judged at all, but simply "skated by" on political influence and financial clout.
The decision, of course, is yours. You can get a mortgage through a large corporation, be assigned a number (and perhaps get treated like one), and then fight to get what ever service you can, from a company that is being forced to comply with ethical practices. Or, you can contact a local Mortgage Broker who will treat you right, just because it's the right thing to do. They have access to all of the same loan programs, and really appreciate your business. They'll listen to your concerns, find the best program available for your needs, and you can start to develop a relationship that will last a lifetime. Especially in light of recent events, the choice seems pretty clear.
FMI
posted by Jack @ Sunday, March 05, 2006
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