A legal aid group is calling on Pennsylvania regulators to investigate Ameriquest Mortgage Co., citing an alleged "pattern of unfair, deceptive and unethical conduct" that could be grounds for revoking its lending license in the state.
In a complaint on behalf of six Ameriquest borrowers, Community Legal Services Inc. of Philadelphia accused the Orange County-based company of using "bait and switch" tactics to stick borrowers with higher fees, rates and payments than promised.
The complaint to the Pennsylvania Department of Banking alleged that Ameriquest repeatedly had made "unsuitable refinancing loans to elderly and low-income homeowners that exceed their ability to pay, sometimes based on false or inflated income information."
A spokesman said Ameriquest wouldn't comment on specific regulatory inquiries and couldn't comment on "details of our borrowers' transactions."
"However," he said, "we are researching the claims under discussion. We work hard to treat our customers fairly and are particularly proud of the part we have played in assisting hundreds of thousands of Americans to secure credit and improve the quality of their lives."
Carol Gifford, a Pennsylvania Banking Department spokeswoman, said regulators were reviewing the petition, which sought to illustrate a "pattern and practice" of deception by describing a series of impoverished, elderly or unsophisticated borrowers allegedly victimized by Ameriquest.
The legal aid group examined 10 loans, including loans to the six petitioners. Four of the six petitioners ended up with their properties in foreclosure, the claim said.
Ameriquest Mortgage and affiliated subsidiaries of its parent company, privately held Ameriquest Capital Corp. in Orange, are the biggest lenders in the so-called subprime mortgage business. The subprime industry finances home loans for people with blemished credit and other financial problems who may not be able to obtain lower-interest-rate loans.
In previous interviews with The Times, Ameriquest representatives said that the company wouldn't tolerate ethical breaches by employees and that it worked hard to stamp out problems when they occurred. Putting customers into loans they couldn't afford made no sense for Ameriquest, the spokesmen said, because the company typically had suffered large losses dealing with foreclosed properties.
