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Doubt Is Cast on Loan Papers

Plaintiffs say identical entries for 3 different Ameriquest borrowers bolster claims of fraud.

March 28, 2005|E. Scott Reckard and Mike Hudson | Special to The Times

TAMPA, Fla. — Idanel Bonaparte's credit record had a few dings when she borrowed $108,000 from Ameriquest Mortgage Co. last year to fix up her aging home.

The divorced nurse had an offsetting advantage, though: a mutual fund account worth $25,456.53.

Linda Hubbard, a widow working three jobs, refinanced her home with a $211,000 loan from Ameriquest a month after Bonaparte. As she spread out the loan papers on her kitchen table recently, she expressed surprise to see that she had been credited with a 401(k) retirement fund. Its balance: $25,456.53.

Romy Hodge, a disabled house cleaner, said she was scraping by on $561 a month in disability income when Ameriquest refinanced her house with a $75,000 loan. The documents she was handed at her loan closing, two months after Hubbard's, also showed a 401(k) account -- totaling, once again, $25,456.53.

Unlike the account balances, the stories of the three Tampa women don't match. Bonaparte said the mutual fund was hers, but Hubbard and Hodge said they had no such investment or anything like it.

For The Record
Los Angeles Times Tuesday March 29, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 40 words Type of Material: Correction
Ameriquest documents -- An article in Monday's Section A about alleged falsification of Ameriquest Mortgage Co. loan documents misspelled the last name of a person who has sued the company in Tampa, Fla. His name is George Soroka, not Sokola.

"Oh, my God, are they saying I owned money? I wish I had money," Hodge said when shown a copy of a mutual fund statement with her name on it.

The identical account balances surfaced in papers obtained by three other Ameriquest customers who have filed lawsuits alleging that the company falsified documents in connection with their loans. The three men say the papers bolster claims from across the country of document falsification by Ameriquest workers.

The Times last month reported allegations, in lawsuits and interviews with former employees, that Ameriquest loan agents falsified applications to help customers qualify for loans or lower interest rates. The agents, in turn, would boost their loan volume and earn more commissions, the lawsuits and ex-workers claim.

Orange-based Ameriquest, the nation's largest lender to homeowners with nicked credit and financial problems, denies any pattern of fraud and contends that the three Tampa suits have no merit and should be dismissed.

Company spokesmen declined to comment on the specific documents in question, but they stressed that Ameriquest took allegations of fraud seriously.

The three plaintiffs contend in court papers that Ameriquest had an "art department" in a Tampa office where loan documents were altered. In interviews with The Times, they've shown stacks of what they say are internal Ameriquest files proving their allegations.

In the case of Hubbard and Hodge, the three plaintiffs said in an interview, it seems that Ameriquest employees simply taped the women's names and addresses onto copies of Bonaparte's mutual fund statement, boosting their financial standing for the loan approval process.

The Times reviewed the documents, and they do look as if Bonaparte's portfolio summary was manipulated with correction fluid and tape to create statements for Hubbard and Hodge.

Michael Ceresoto, an attorney for Ameriquest, said the company had been investigating questionable practices at its Cypress Street branch in Tampa for some time. He declined to specify whether allegations about the so-called art department were part of the inquiry, but he said "a number of people" who worked in the Cypress Street office had been fired as a result of the probe.

Ceresoto also said The Times' questions about the account statements had been referred to Ameriquest's fraud investigators.

"When the company sees something going on that's wrong, they take extraordinary measures to make it right," including suing those involved and reporting them to law enforcement, said Ceresoto, a lawyer with Buchalter, Nemer, Fields & Younger in Los Angeles.

Ceresoto added that Ameriquest had spent large amounts to prevent its employees from engaging in fraud-tainted transactions so that it wouldn't get stuck with foreclosed property or be forced to buy back bad loans from investors.

"All lenders fight fraud because it costs them money," the company said in a statement to The Times. "Ameriquest is no different."

Although that is undoubtedly true, critics say, the alleged use of altered documents, if confirmed, spotlights Ameriquest's "boiler room" culture, in which employees are under tremendous pressure to churn out as many loans as possible.

The plaintiffs in the Tampa lawsuits -- George Sokola, Brian Fichtner and Robert Hughes -- maintain that the alleged misdeeds in Florida were carried out by workers determined to sell loans by whatever means necessary.

The three men were among dozens of former Ameriquest employees and borrowers who contacted The Times after it reported last month that consumer lawsuits in at least 20 states allege a pattern of fraud, falsification of documents and bait-and-switch sales tactics at Ameriquest loan offices.

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