In fact it will cost you $325,000,000.
“The Law News Network – Attorney General Eliot Spitzer and the Attorneys General and banking regulators of 48 states today announced a $325 million agreement with the nation’s largest subprime mortgage lender to overhaul its existing sales, appraisal and closing practices” [LawFuel].
Ameriquest primarily makes refinance loans to homeowners seeking to consolidate credit card and other debt and generate overall monthly savings. After refinancing with Ameriquest, however, consumers were often trapped in mortgages they could not afford, and were left with little or no equity in their homes.
Of particular interest to me was that the settlement requires Ameriquest to:
Overhaul its appraisal practices by prohibiting sales personnel from selecting, contacting, or attempting to influence appraisers
That is encouraging but there are two major questions here as it relates to appraisers:
- How does an organization with wide-spread problems in their appraisal process, which sees influencing appraisers is part of the aggressive culture, reform itself? How would they know where to begin? How would they know what is right and wrong?
- And why are these issues with Ameriquest ANY different than the majority of wholesale lenders?