America’s largest subprime lender pays $325 million in fines and restitution

Ameriquest Mortgage Company, which funded a record $41 billion in mortgages in 2003, has agreed to pay $325 million in fines and restitution to borrowers in 49 states.

The company makes loans at high rates to “subprime” borrowers. People who borrow from such lenders typically have poor credit ratings and often feel that they have no choice but to deal with Ameriquest, which does extensive advertising and promotion.

Ameriquest apparently took advantage of the situation to commit deception and fraud. As Attorney General Reilly of Massachusetts put it: “This company promised cheaper monthly payments, better terms and cash on time. Instead, consumers got higher rates, prepayment penalties and large point charges.”

Caveat emptor! Let the buyer beware.

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