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Ameriquest: Socially Responsible or Reprehensible? Ameriquest, a private sub-prime mortgage lender, considers itself “the proud sponsor of the American Dream”, but many consumers and former employees of Ameriquest feel otherwise, as they tell nightmarish stories of deception.
The company is one of the nation’s leading private sub-prime lenders. Originally known as a bank named Long Beach Savings and Loan, Ameriquest has undergone significant change since its 1979 inception. The company moved its corporate office to Orange County in 1991, where it became a pure mortgage lender and changed their name to Long Beach Mortgage Company in 1994.In 1997 the company split in two, and the retail portion of the business became what is now known as Ameriquest. (Wikipedia) Ameriquest has had its share of ups and downs throughout its transformation, including some major lawsuits, forcing the company to change their lending guidelines, and exposing some potentially dangerous practices of the company. Most recently Ameriquest has been in the media for the company’s restructuring of their workforce, which has resulted in a series of layoffs totaling nearly 9,000 workers.
(Job Cuts Totaling 3,000 at ACC? Ameriquest has had many customer complaints for allegedly deceiving customers, and conducting predatory lending practices. These allegations led to a $325 million settlement agreed to by Ameriquest, as well as a new set of “best practices” the company was forced to implement. The Washington Post reported, “State prosecutors and lending regulators in 49 states and the District [of Columbia] have reached a wide ranging $325 million settlement with Ameriquest Mortgage Company, the nation’s largest lender to home loan borrowers with poor credit to resolve allegations that the company defrauded and mislead consumers.It is the second largest consumer protection settlement in U. S. history, following the $484 million predatory lending agreement reached in 2002 with Household Finance Corp.
” (Downey) Ameriquest, being a large non-prime lender, stands on principles of helping groups of people who otherwise may not have the opportunity to be a homeowner, such as those with not so perfect credit, minorities, and lower income borrowers, realize the dream of homeownership. Affording Americans the opportunity to achieve such a large dream is very admirable; be that as it may many American families feel that Ameriquest has done just the opposite.A simple Google search yields several results of consumer complaints on sites such as ripoffreport. com and consumeraffairs. com, as well as articles reporting predatory lending claims and employee complaints about the huge company.
Tony of Stanwood, WA story is one of many on consumeraffairs. com, as Tony claims Ameriquest made false promises, lied about pre-pay penalties, charged him hidden fees, misquoted him the rate for his adjustable rate mortgage, purposely held payment to make them late, and charged late fees on payments which were on time.Due to this negative experience Tony states “I have been lied to, screwed over etc. like everyone else doing business with this company.
I will refi no matter what the fees to get out from under them. ” (consumeraffairs. com) Consumers are not the only ones who have lodged complaints about the company. Although Ameriquest offers an attractive salary and benefits package to employees, Ameriquest has received complaints from employees for allegedly forcing employees to commit misdeeds and fraud, as well as to work long hours in a very highly pressure work environment.
Ameriquest has been named in a class action lawsuit claiming the company did not fairly compensate loan officers for overtime pay (Bergquist). The tremendous amount of pressure put on loan officers may be an explanation for so many complaints of deceit. Former employees Mark Bomchill and Lisa Taylor recalled extreme pressures to boost loan volume by any means necessary. “It was so out of hand, I was juggling 10 to 15 loans each month, says Bomchill, who now works as a loan consultant at Plymouth Minn. based All State Residential Mortgage. “And there were guys in my office doing two to three times as I was.
No one ever thought to question whether [the loan] was right for the customer or the lender. It was just do the deal and move on to the next. ” But Bomchill claims the high volume of loans he was working on during his one year of tenor at Ameriquest never proved to be quite enough. “Even though he and others in his office were closing more than 80 loans every month, it wasn’t enough to satiate upper management.
‘Every day my boss would scream and yell at us to make more calls, solicit more suckers,’ he says. ‘He was a tyrant. It never ended. ” The work environment for the branch employees are often compared to the Hollywood movie boiler room.
“Lisa Taylor, a former Ameriquest loan agent says the atmosphere in her office was very similar to the environment portrayed in the 2000 movie Boiler Room starring Giovanni Ribisi and Vin Diesel. In fact, one manager used the film as a teaching model. According to Taylor, promoting the anything-to-get-the-deal mentality resulted in abuses. One-time she says she walked in on co-workers using a brightly lit Coca-Cola vending machine as a tracing board where loan agents were copying borrower’s signatures onto blank documents.
(Barrett and Carr) This is not the only story of fraudulent practices occurring by former employees of Ameriquest, Chris Arnold of NPR News reported “some former employees of the nation’s leading sub-prime lender say the company encouraged them to conceal rate terms and make fake fixed-loan documents that pushed customers into loans they couldn’t afford. ” (Arnold) It is obvious that there is a lasting effect on the customers and employees who were subjected to the alleged acts of this mortgage giant, but what about the repercussions on the economy?How is the economy affected by all of the loans that may have been made in bad faith by a company possibly practicing as a predatory lender? Foreclosures are expected to rise significantly, and affect the economy. “On a national level, rising sub prime mortgage foreclosures are sure to have a ripple effect. What the effect will be is a matter for debate – but at least one analyst thinks we’ve only seen the tip of the iceberg.
Professor Cathy Lesser Mansfield of Drake University Law School has studied default and foreclosure rates in the sub prime mortgage industry.Mansfield tells Michelle Norris that she expects more foreclosures and defaults on loans to have a ripple effect on home values in affected neighborhoods – and the ability for families to pay for other basic needs. ”(Norris) According to Jack Speer of NPR News “efforts are under way on several fronts to forestall a wave of home foreclosures due to problems in the mortgage market. Legislative solutions are one option, but non profits and many smaller lenders are also stepping up efforts to help borrowers.
(Speer) Although there have been many reports of the negative effect of Ameriquest’ practices, Ameriquest does make many efforts to contribute to the communities which they serve. Ameriquest has been a large contributor to many charities which benefit children, and a large proponent of financial education. Ameriquest has designed several unique programs to give back, such as the Create Your Legacy Program, Dream saver, S. A. F. E.
, and the Affordable Homeownership Program. Ameriquest has also contributed to victims of Hurricane Katrina thorough their Gulf Coast Rebuilding Fund.Ameriquest employees have participated in building homes on the Gulf Coast, as well as building homes throughout the nation with Habitat for Humanity, as well as local playgrounds with Kaboom through its league of volunteers program. (ameriquestcares. com) Roland Arnall, owner of Ameriquest, is known as a philanthropist and large political contributor. Arnall has been named Ambassador to the Netherlands.
While charity may be a high priority of Ameriquest, the damage done to consumers, employees, and the economy outweighs the positive factors of the company.Ameriquest has not proved to be socially responsible, and will require a change in company culture, as well as a strong customer relationship management program to become a socially responsible company. The Best Practices which were implemented by the company after the Jan 2006 lawsuit is a start, but a change of this magnitude requires a true change in the company’s philosophy. The company motto “Do the Right Thing” and “Continuous Improvement” must become more than simply words, and turn into actions.
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