As Ameriquest Mortgage Co. sets aside $325 million for a potential settlement with regulators in 30 states over allegations of unfair lending practices, the firm's billionaire founder is being considered for a U.S. Ambassador post.
Parent company ACC Capital Holdings Corp. announced it recorded the multimillion dollar provision in connection with negotiations that are ongoing with financial regulatory agencies or attorneys general offices in 30 states relating to the lending practices of Ameriquest Mortgage.
Based on extensive discussions with the regulators, the subprime lender said the provision reflects the company's "best estimate" of its maximum financial liability for a comprehensive resolution of the matter.
The Orange, Calif.-based lender said that although a definitive agreement may not be achieved, it "is focused on resolving the issues under discussion with these agencies so as to reach a resolution that is fair to customers and fair to the company."
Earlier this month, Ameriquest, which has repeatedly been accused of running a boiler room operation that encourages employees to commit fraud, agreed to pay $7 million to settle allegations by a Connecticut regulator that it was overcharging on refinance loans and employing unlicensed loan officers.
Prior to that, the subprime lender had agreed to pay $50 million to settle a class action lawsuit by borrowers in four states accusing it of inflating fees and changing promised interest rates.
Ameriquest's billionaire chairman and founder, Roland Arnall, will be nominated by President Bush to be the U.S. Ambassador to the Netherlands, according to a White House announcement Thursday.