Washington State Department of Financial Institutions

Ameriquest Allegations

The states alleged that Ameriquest:

Fraudulently Inflated Appraisals
Ameriquest account executives pressured appraisers to fraudulently inflate the market value of homes of potential borrowers in order to make loans, or make loans larger. Consumers were stuck with loan balances significantly higher than the true value of their homes, which ultimately blocked them from refinancing with other lenders or selling without taking a substantial loss.

Fabricated Borrower Income
Ameriquest falsified borrower income and employment records in order to qualify borrowers for larger loans than their actual income would support. Homeowners were allegedly told to use occupations that are difficult to trace, such as a housecleaner or interior designer, and to declare income from non-existent renters.

Misrepresented Loan Terms
Ameriquest misrepresented loan terms by promising borrowers the best, lowest interest rate for which they qualify, while providing salespeople with strong incentives to charge the highest possible rate.

Rushed Closings and Hid Interest Rates
Ameriquest rushed closings and hid interest terms until as late in the process as possible, forcing potential borrowers, to financially and emotionally commit themselves and make it difficult for them to back out once they discovered the high rates.

Used High-Pressure Sales Tactics
Ameriquest used a highly skewed compensation system, accompanied by intense pressure by management to reach desired sales levels and monthly quotas – even to the extent of belittling loan officers who didn’t measure up to expectations. This combination drove many loan officers to pressure and mislead consumers into accepting unfavorable loans that generated substantial commissions for loan officers and their managers.

Provided Untimely Funding
Ameriquest closed loans before it had completed appraisals. In some cases, despite the fact that homeowners have completed a closing, Ameriquest reneged on its obligation to fund the loan.

Provided Disparaging Disclosures.
Laws require that homeowners receive both a Truth in Lending Act (TILA) disclosure featuring the annual percentage rate of the proposed loan and a Good Faith Estimate of the costs of the loan, as required by the Real Estate Settlement Procedures Act (RESPA). Ameriquest account executives regularly told homeowners that they should ignore the TILA/RESPA disclosures and that these disclosures were not representative of the actual loan terms they would receive, or would otherwise belittle the accuracy and relevance of the TILA/RESPA disclosures.