Industry News

New crackdowns on subprime lenders may be on the way

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Ameriquest Mortgage Co.'s agreement last week to pay $325 million and reform its operations could turn out to be the first in a series of regulatory actions targeting subprime mortgage companies, the Los Angeles Times reported Tuesday. On Jan. 23, the parent company of Ameriquest Mortgage Co. announced a $325 million settlement of allegations that it deceived borrowers, falsified loan documents and pressured appraisers to overstate home values. A task force of 49 states and the District of Columbia investigated the Orange County, Calif.-based company and two affiliates -- all specialists in higher-cost mortgages to borrowers unable to qualify for bank loans. The company agreed to overhaul its lending practices without admitting wrongdoing. Now, similar investigations are underway by state regulators targeting other subprime lenders, Chuck Cross, director of consumer services for Washington state's Department of Financial Institutions, told the Times. "We're constantly talking about w...