State prepares to pay mortgage holders
OLYMPIA — State leaders say more than 12,000 residents are eligible for restitution from a fraudulent mortgage company.
Attorney General Rob McKenna and Department of Financial Institutions Director Scott Jarvis recently announced more than 12,000 Washington residents are eligible for an estimated $9.1 million in restitution from Ameriquest Mortgage Company and its related companies.
The money comes from last year's $325 million national settlement, in which states alleged widespread fraud by Ameriquest as part of a high-pressure scheme to sell mortgages which trapped consumers into debt and put them at risk of losing their homes.
"It is the second-largest consumer recovery in history at $295 million in restitution and another $30 million in attorney's fees and costs for the state," Assistant Attorney General David Huey said. "It provided for a major change in the operation of Ameriquest which is one further step down the road of establishing an industry standard."
Letters and claim forms were sent to eligible Washington consumers this week. To receive restitution, consumers must mail their completed, signed form to the settlement administrator by Sept. 10.
Washington received more money for legal costs than most states because of its leadership role in the investigation and settlement negotiations, McKenna explained.
Under the settlement, more than 481,000 borrowers nationwide who were customers of Ameriquest Mortgage Company, Town and Country Credit Corporation and AMC Mortgages, Inc., formerly known as Bedford Home Loans, between Jan. 1, 1999, and Dec. 31, 2005.
Huey said Ameriquest has closed nearly all of its offices nationwide and many businesses have closed since the settlement.
Washington consumers who participate in the settlement receive payments from as little as $100 to as much as $4,400, depending on when they applied for a loan and individual circumstances.
Consumers who opt to receive the restitution payments relinquish their right to file lawsuits or participate in class actions against Ameriquest related to the loans covered by the settlement. Eligible individuals are encouraged to consult with a private attorney or a legal services attorney before deciding whether to participate in the settlement.
"It means people who are contemplating getting involved in predatory lending had better think twice because there are folks out there who are prepared to put a stop to it, namely the attorneys general and the state financial regulators," Huey said. "Now would be a very bad time to go into the business of taking advantage of people with their home mortgages."
Huey encourages anyone victimized by predatory lending to seek legal assistance in pursuing their claim.
"Because of our settlement, courts will probably be more receptive to claims of predatory lending because, hey, the state attorneys general have said it's going on and it's a serious national problem which needs to be addressed," he said. "Even where you have a company which isn't one of the major ones, I think there's going to be a heightened awareness of what's been going on."
People should sign as many borrowers as possible on their claim form, Huey said, with a letter of explanation in case they cannot get all borrowers due to death, divorce and the like. The attorneys general have left some time to resolve some situations, he said.
Huey anticipated checks would begin mailing before the end of the year.
"Home ownership is a great thing and it's been a strong public policy for this country for at least 50 years and probably considerably longer," he said. "What we're concerned about is we don't want to turn it into home losership, so people need to take great care when they're entering into home mortgages."
Detailed information about the settlement and eligibility for restitution is available at www.ameriquestmultistatesettlement.com. Consumers may also contact the settlement administrator at 1-800-420-5875. Hearing-impaired persons may call 866-494-8274.