Perfect Home Living sees Utah share in $325 Million Dollar settlement with Ameriquest Mortgage Company as US Housing Market sets another Record in 2005
January 30, 2006 (PRLEAP.COM) Business NewsWest Valley City, UT / Press Release / — New home sales catapulted to an all time high in 2005 for a fifth year in a row according to the Commerce Department. Sales of new single-family homes amounted to 1.28 million units last year, a 6.6 percent increase over last year’s 1.20 million units, the previous all-time high.
Even with such record settings, the economic growth in the US weakened unexpectedly in the fourth quarter of 2005, rising by 1.1 percent, the slowest pace in three years according to government reports.
This intensity of economic slowdown has many analyst concerned about other trends emerging. In the housing market a trend of great concern is mortgage fraud.
As the U.S. housing market enters into 2006, Ameriquest Mortgage Company, the nation's largest sub-prime lender and its parent company ACC Capital Holding Corp have agreed to pay $325 million to settle allegations of unlawful lending practices and mortgage fraud.
According to statements from former and current employees top-down pressure was mandated to boost loan sales that ultimately created "boiler room" atmosphere where workers forged documents and inflated borrower's incomes and home values to qualify them for loans they couldn't afford.
The California-based company has agreed to refund $295 million to consumers and make sweeping reforms of practices that states alleged amounted to predatory lending. Ameriquest according to Jacksonville Business Journal will also pay a total of $30 million to the states (approximately $600,000 per state) for costs associated with the investigation and consumer education and enforcement. Utah families can expect to receive approximately $1,875,000.
Under the agreement, Ameriquest is required current requirements in place that protect borrowers. New requirements must include:
§ Full disclosure of terms – including specific language to be included in loan documents that explains in simple language the terms of their loan, including rates, points and penalties, if any.
§ Giving borrowers notice before closing on their loan if any changes are made to the loan terms.
§ Restrictions on refinancing offers and prepayment penalties.
§ The company will also take steps to make sure borrowers applying for stated income loans, or loans in which borrowers don’t offer proof of income, sign statements certifying they’re telling the truth.
§ Independent third parties will now handle closings, at which borrowers are asked to review and sign final loan documents.
§ Courts must approve any settlement before it becomes final.
In Utah families can find out if they are eligible for receiving restitution by contacting the Utah Attorney General’s Office at 801.366.0260.
About Perfect Home Living
Perfect Home Living assists in implementing programs and providing training to financial institutions regulated by the FDIC and state and federal crime task force units that address mortgage fraud related crimes. For more information or to request assistance from Perfect Home Living please visit us online at: http://www.PerfectHomeLiving.com