The Ameriquest group of subprime lenders has agreed to settle 29 class-action lawsuits alleging predatory lending. The group has pledged $22 million to repay those aggrieved borrowers, which is merely a fraction of payments they made in previous suits before Ameriquest shut down as the mortgage meltdown began.  This settlement potentially affects 712,000 borrowers across the United States.

Ameriquest, based in Orange County, California, was once the nation’s largest subprime lender. Many of the loans included in the settlement were from Argent Mortgage Co., an arm that funded borrowers through mortgage brokers.  Also involved in this latest settlement were AMC Mortgage Services Inc., Bedford Home Loans Inc., Town & Country Credit Corp., Olympus Mortgage Co. and Ameriquest Mortgage itself. The settlement proposal, filed in U.S. District Court in Chicago, bars all parties from discussing it. But the proposed settlement terms were spelled out in the letters recently mailed to borrowers and online at https://ameriquestmdlsettlement.com.

The agreement covers loans dating back to December 14, 2001, and sorts claims into five categories, including hefty upfront charges, loans with variable rates when fixed rates were promised, and interest rates that were higher than promised by nine-tenths of a percentage point or more.  Payments to borrowers will differ depending on the relative strengths and potential damages of each type of claim, and the proposal excludes borrowers who accepted previous individual and class-action settlements.

Those previous individual and class-action settlements include Ameriquest’s 2006 payment of $325 million to end an investigation by 49 state Attorneys General who alleged it had deceived borrowers, pressured appraisers to overstate home values and falsified loan documents; and a San Mateo County private-party lawsuit on behalf of Alabama, Alaska, California, and Texas, borrowers that the company settled for $50 million in 2005.  The settlement by the Attorneys General provided an average of more than $900 for the borrowers who accepted it. By contrast, the current class-action settlement, which must be approved by a federal judge, works out to a bit more than $30 for each potential class member, and only $20 after administrative costs and legal fees.

The borrowers had until February 22nd to opt out of the settlement if they wanted to pursue their own lawsuits. To receive settlement funds, borrowers must fill out and submit a claim form no later than the 9th of this month. Those who have neither opted out or submitted a claim form will receive no settlement money. They will have also given up all rights to file suit and seek damages. If you need additional information on this type litigation, you can contact Bill Robertson in our firm at 800-898-2034 or by email at Bill.Robertson@beasleyallen.com.

Source: Los Angeles Times

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