The parent company of Orange-based mortgage lender Ameriquest Mortgage Co. said Monday it has come to terms with attorneys general in a long expected settlement of an investigation into its lending practices.
The company has agreed to pay $295 million to consumers and implement reforms.
Ameriquest, the nation’s largest lender to borrowers with imperfect credit, also agreed to pay $30 million to 49 states and the District of Columbia for investigation costs and consumer education.
Ameriquest acknowledged no wrongdoing in the settlement.
California is set to get the largest portion of the settlement, about $47 million.
Among the reforms, Ameriquest plans to provide borrowers with a one-page form describing loan terms. It also plans to provide employees with uniform scripts to describe loan terms and conditions.
The investigation charged that salespeople at Ameriquest had concealed interest-rate and loan costs during the loan process. Attorneys general also contended that appraisers inflated the values of borrowers’ homes and used high-pressure tactics to close deals.
The settlement has been expected for months. The investigation had been a hurdle for Ameriquest owner and chairman, Roland Arnall.
Last year, President Bush nominated Arnall to be U.S. ambassador to the Netherlands. Confirmation is expected with the settlement.
