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Attorney General Andrew M. Cuomo and State Banking Superintendent Richard H. Neiman today announced nearly 25,000 homeowners across New York State are eligible to receive restitution as a result of a $325 million settlement with Ameriquest Mortgage Co.

July 12 , 2007

New York, NY - Attorney General Andrew M. Cuomo and State Banking Superintendent Richard H. Neiman today announced nearly 25,000 homeowners across New York State are eligible to receive restitution as a result of a $325 million settlement with Ameriquest Mortgage Co. and its subsidiaries.

The settlement, a result of a multistate investigation, led by the New York State Attorney General and Banking Superintendent, along with 48 Attorneys General,  found Ameriquest engaged in predatory and illegal lending practices to sell refinance mortgages including misrepresenting and failing to disclose loan terms; charging excessive loan origination fees; and inflating appraisals to qualify borrowers for loans.

“When refinancing with Ameriquest, consumers put at risk the foundation of their American dream – their home,” said Attorney General Andrew Cuomo. “In reality, Ameriquest profited handsomely from its schemes while defrauded victims found themselves trapped into debt and at risk of losing their homes.  This settlement sends the message that fraudulent and discriminatory real estate deals will not be tolerated in the State of  New York.”

The settlement requires Ameriquest to drastically modify its existing sales, appraisal and closing structure, and to submit to monitoring by the states for a period of five years.  The Agreement also requires 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 25,000 New York consumers are eligible to receive restitution from these two funds.  Eligibility is based on the presence of specific, objective information and data contained in the consumer’s loan files and payment history, which would indicate that the borrower was likely subjected to Ameriquest’s fraudulent and illegal practices and suffered harm as a result.

“This action is an example of what states can accomplish through collaborative efforts between regulatory bodies and state Attorneys General,” said Richard Neiman, Superintendent of Banks. “Subprime lending is still a significant issue for borrowers and communities in New York, and we look forward to continued coordinated efforts to address mortgage fraud and predatory lending practices.”

Restitution notices were mailed out to consumers earlier this week. The notices identify, among other things, the minimum amount of restitution the consumer can expect to receive and the steps to take to accept the restitution offer, including mailing a completed and signed acceptance form and release by September 10, 2007.  

The actual restitution amount the consumer will receive will depend on how many eligible New York consumers decide to participate in the settlement.  Consumers taking part in the settlement will be required to give up their right to file any lawsuit or participate in any class action against Ameriquest relating to the loan(s) for which they receive restitution. Therefore, consumers are encouraged to consult with a private attorney or, if they qualify, a legal services attorney before deciding whether to participate in the settlement.  However, consumers who sign a release will not forfeit their right to assert any claim against Ameriquest as a defense to a foreclosure proceeding.

A “Frequently Asked Questions” pamphlet mailed with the claim form provides additional information about the restitution process for eligible consumers.  Consumers can also obtain detailed information about the settlement and their eligibility for restitution by contacting the Settlement Administrator at 1-800-420-5875 (anyone hearing impaired can call 1-866-494-8274) or by viewing the settlement website at http://www.ameriquestmultistatesettlement.com