More than $18 million is being distributed to 13,686 New Yorkers eligible to receive restitution as a result of a $325 million settlement with Ameriquest Mortgage Co. and its subsidiaries stemming from predatory loan practices, the New York State Attorney General”™s Office announced last month.
Predatory and illegal lending practices that Ameriquest may have used to encourage homeowners to refinance mortgages included misrepresenting and failing to disclose loan terms, charging excessive loan origination fees, and inflating appraisals to qualify borrowers for loans, according to Gov. Eliot Spitzer.
“As homeowners throughout the state and the country grapple with the fallout from subprime mortgages we must do all we can to soften the blow,” said Spitzer in a statement.
The agreement, which was announced in January 2006, required Ameriquest to pay the states $295 million for restitution divided into two separate funds: a $175 million fund to be distributed under a nationwide formula to most consumers who received an Ameriquest loan between January 1, 1999 and April 1, 2003; and a $120 million fund to be divided among the states based on the volume of Ameriquest loans made in each state, to be distributed, at each state”™s discretion, to consumers who received an Ameriquest loan between January 1, 1999 and December 31, 2005.
Approximately 63 percent of the 21,709 eligible New York consumers participated in the restitution.
Checks were mailed to participating consumers on Thursday, Dec. 13th and Friday, Dec. 14th.
“Through their aggressive use of deceptive and predatory lending practices, Ameriquest both exploited borrowers and contributed to today’s staggering crisis in the mortgage industry,” said Attorney General Andrew Cuomo.
The New York Attorney General”™s office, along with attorneys general from Iowa, California, Illinois, and Washington, and the New York Banking Department led the multi-state investigation of Ameriquest.
