Ken Paxton

Ameriquest Settlement Agreement FAQ

Q: What kinds of practices were the states investigating?

The states were investigating reports that Ameriquest personnel were using a variety of high pressure tactics to convince people to refinance their homes with Ameriquest, even when the refinancing offered no financial advantage to the borrower. Some of these tactics included misrepresenting the terms of the proposed loan, inflated appraisals of the property and inflated income statements. Borrowers could end up owing much more than their houses were worth, thus making it very difficult to sell the house or refinance with any other lender.

Q: What does the settlement require Ameriquest to do?

Basically, Ameriquest is required to tell borrowers the truth and treat them fairly. For example, they must organize their sales structure to prevent the sales people from encouraging appraisers to inflate values and must offer correct Truth-in-Lending disclosure statements to prospective borrowers. You can read the full text of the settlement agreement here.

Q: If Ameriquest has foreclosed on a home, will the settlement get the home back?

No. Borrowers may be eligible for some monetary relief from the settlement, but it will not compensate them for the loss of their homes.

Q: If Ameriquest did not properly explain loan terms or included false information on the loan application, will the settlement require Ameriquest to renegotiate a loan?

No. The settlement agreement does not require Ameriquest to renegotiate loans. Because of the large number of borrowers, the states are unable to negotiate individual resolutions. If you believe Ameriquest acted illegally in offering your loan, you may wish to consult a private attorney.

Q: I had (or have) a loan with Ameriquest. Will I get some money from the settlement?

That depends. The settlement agreement sets aside $175 million to be divided among borrowers who took out loans with Ameriquest between January 1, 1999 and April 1, 2003, and whose loans included certain characteristics like high interest rates, large numbers of discount points and prepayment penalties. The Settlement Administrator will apply an agreed upon formula to each loan from that time period to determine the amount of money that will be paid to each consumer.

In April 2003, Ameriquest changed its sales process to correct some of the worst abuses identified, so the Settlement Agreement sets aside a smaller amount of money, $120 million, to be divided among borrowers who took out loans with Ameriquest from January 1, 1999 through December 31, 2005. The states have not yet determined the formula for distributing this fund.

Q: How much money will I get?

We do not yet know how much money each eligible consumer will receive. Because of the large number of borrowers, consumers should not expect to receive thousands of dollars.

Q: When can I expect to receive money from the settlement?

Not for at least a year. The settlement requires Ameriquest to pay into a Settlement Fund over the next 12 months. After all payments are received, the Settlement Administrator will distibute payments to those eligible to receive them.

Q: Do I need to file a complaint or a claim to get money from the settlement?

Not at this time. If a complaint or claim is going to be required our office will publicize that fact. Still, if you have had a problem with Ameriquest concerning these or any other practices, you are welcome to file a complaint with our office.

Q: I have received a notice about a class action lawsuit by private attorneys. Can I get payments from both cases?

Accepting payment from this settlement may mean you cannot obtain additional relief from another suit. If you are confronted with this choice, you should consult a private attorney who can explain your rights to you.

Q: I have already filed a complaint with the Attorney General about Ameriquest. Does that mean I get money from the settlement?

Not necessarily. Eligibility for payments from the settlement will be determined by applying a set of criteria to each Ameriquest loan in the time period covered by the settlement (January 1, 1999 through December 31, 2005).

Q: I have a complaint about Ameriquest that is not covered by the settlement. Should I file a complaint with the Attorney General?

You are welcome to file a complaint with our office. You may also wish to register a complaint with the Consumer Credit Commissioner or the Department of Savings and Mortgage Lending.