Ameriquest Mortgage Co. may settle charges brought on by 33 states and clear a path for the company's billionaire founder to take a job with the U.S. State Department.
Business practices would be overhauled under the supervision of an outside monitor and Ameriquest would make a payment of $325 million -- $295 million refunded to borrowers and $30 million for states' investigation costs -- under terms outlined in a copy of a proposed settlement, the Los Angeles Times reports. But the latest agreement -- the fifth version -- was reportedly drafted by states, and Ameriquest is not necessarily 100 percent on board yet.
Earlier this year, Ameriquest set aside $325 million in anticipation of a settlement. At the time the company 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."
Roland Arnall, founder of the Orange, Calif.-based company and the 73rd richest man in the U.S. according to Forbes magazine, has raised $12 million for President Bush since 2002 and is the current nominee for ambassador to Holland. Putting states' charges behind the company would lift a cloud surrounding his nomination.
Attorneys general in multiple states charged the subprime lender with unfair lending practices, while the Times reported in a series of articles that employees were working in boiler room operations and pressured to use abusive tactics.
Among items in the draft outlined by the Times was a proposal to eliminate employee compensation tied to higher fees, one requiring loan originators to use more truthful language, and another cracking down on pressuring appraisers to push values higher.