14,000 N.J. Borrowers Eligible for Total of $11. 7 Million Restitution

14,000 N.J. Borrowers Eligible for Total of $11. 7 Million Restitution

Consumers must mail completed and signed forms to the Settlement Administrator by September 10, 2007.

TRENTON – Attorney General Anne Milgram announced – July 12 – that approximately 14,000 Ameriquest Mortgage Company consumers in New Jersey are eligible to receive a total of $11.7 million in restitution from Ameriquest and its related companies as part of a national settlement that resolves allegations of predatory lending.

Milgram said her office and the state Department of Banking and Insurance send letters and claim forms to eligible New Jersey consumers. To participate in the settlement and receive restitution, eligible consumers must mail completed and signed forms to the Settlement Administrator by September 10, 2007.

“Eligible New Jersey consumers who borrowed from Ameriquest and were impacted by questionable business practices – practices that have been eliminated or modified as a result of this agreement – are now closer to receiving restitution if they are participating in the settlement,” said Milgram.

“We take the threat of predatory lending very seriously, and we are pleased that through this cooperative effort we were able to recover funds for consumers who were victimized in this instance,” said Department of Banking and Insurance Commissioner Steven M. Goldman. “We remain vigilant in our efforts to prevent this conduct, and we urge any consumer who believes they may have been subjected to predatory practices to contact us with their concerns.”

The forms mailed to each Ameriquest consumer will indicate the minimum payment the consumer can expect to receive. However, the exact amount could be larger, depending on how many eligible Ameriquest customers in New Jersey elect to participate in the settlement. Attorney General Milgram encouraged eligible consumers to review the claim forms and information they receive, and to submit a reply as soon as possible.

Milgram noted, however, that consumers who opt to receive restitution payments relinquish their right to file lawsuits against Ameriquest related to loans covered by the settlement. For that reason, she said, consumers may want to consider consulting with a private attorney or, if they qualify, a legal services attorney before deciding whether to participate in the settlement. (Consumers who participate in the settlement do not, however, give up any claim they may otherwise raise if their home goes into foreclosure.)

Under the settlement agreement, more than 481,000 borrowers who were customers of Ameriquest Mortgage Company, Town and Country Credit Corporation and AMC Mortgage Services, Inc. (formerly known as Bedford Home Loans) between January 1, 1999 and December 31, 2005 are eligible to receive restitution payments. Restitution payments nationwide are expected to total more than $300 million.

Consumers can obtain detailed information about the settlement and their eligibility for restitution by going to the Settlement Administrator’s Web site: www.ameriquestmultistatesettlement.com. Consumers may also contact the Settlement Administrator at 800-420-5875 (persons with hearing-related disabilities may call 866-494-8274.)

The Ameriquest settlement resolves allegations of predatory lending practices by Attorneys General and banking and finance regulators in New Jersey and every other state except Virginia (where Ameriquest did not do business), as well as the District of Columbia.

Among other things, Ameriquest and the affiliate companies allegedly misrepresented and did not adequately disclose the terms of home loans, charged excessive loan origination fees and prepayment penalties, refinanced borrowers into improper or inappropriate loans, and improperly inflated appraisals used to qualify borrowers for loans.

The total $300-million-plus settlement payment by Ameriquest ranks as the second-largest state or federal consumer protection settlement in history, after the $484 million predatory lending agreement reached in 2002 between most states, including New Jersey, and the Household Finance Corporation.

Ameriquest primarily makes refinancing loans to existing homeowners who are hoping to consolidate credit card and other debt into their new home mortgages and realize overall monthly savings. Borrowers who do not have the best credit rating may turn to sub-prime loans, which often have higher interest rates and other costs attached. Based in Orange, California, Ameriquest Mortgage is a subsidiary of the ACC Capital Holding Corporation. ACC was also party to the settlement agreement along with the subsidiary companies Town and Country Credit and AMC Mortgage.

Deputy Attorney General Sharon Young of the Division of Law’s Banking and Insurance Section and Deputy Attorney General Brian Brennan of the Division of Law’s Consumer Fraud Protection Section handled the matter on behalf of the state.

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