Ameriquest Sued Over Refis

Ameriquest did not return calls for comment.

The plaintiffs say they were charged excessive fees and points, undisclosed prepayment penalties and given loans with terms substantially different from what they were verbally promised.

Some of the homeowners said they were charged loan fees of five percent when one percent of the loan amount is a more typical amount.

The homeowners said they were induced by “bait and switch” tactics to refinance existing loans, often on worse terms. In court papers, the homeowners said Ameriquest persuaded them to refinance by promising no upfront costs, fixed interest rates and all-inclusive low monthly payments, but, when they went to closing the terms given were different from those promised.

Harold Bowyer said he refinanced his $107,100 loan at 7.7 percent that had a floor of 7.7 percent and a ceiling of 13.7 percent after a St. Louis mortgage broker promised him 6 or 7 percent. However, the interest rate on the new loan started at 10.15 percent and had a ceiling of 16.15 percent.

One of the couples in the lawsuit refinanced with Ameriquest four times in 16 months. Randy and Mia Bier accused the lender of breaking public promises that it would not seek consumer refinances of the loans it issued for 24 months and of breaking a promise not to charge prepayment penalties in the St . Louis area for three years.

The borrowers claim that Adam J. Bass, then the senior executive vice president of Ameriquest, told the Senate Committee on Banking Housing and Urban Affairs that Ameriquest did not attempt to refinance its loans within two years when that was not the case. The homeowners also disputed Bass’ reported assertion that the disclosures provided by the company were easy to read.

The homeowners also said the promises are part of a “best practices” Ameriquest reportedly adopted in 2000, prompted as a result of a campaign by the Association of Community Organizations for Reform Now, that it would not refinance its loans within 24 months of origination, that there would be no prepayment penalties in the St. Louis area for three years and that the company would timely provide plain English disclosures.

“Despite Ameriquest’s publication of the ‘Best Practices’ and frequent references to the policy in public statements, Ameriquest has often failed, and continues to fail, to live up to its promises,” the plaintiffs said in court papers.

The borrowers are asking for recession of the loans, punitive and actual damages, attorneys’ fees and for an injunction forbidding Ameriquest from engaging in any similar acts in the future.

The lawsuits were filed in the circuit court in St. Louis and several Missouri counties.