When Ameriquest launched its national branding strategy in spring 2004, Vice Chairman Adam Bass said the company was "moving beyond our nonprime lending roots" into a "new era ... beyond serving only borrowers with credit challenges."
Morefield acknowledged last week that only a pilot program had been undertaken so far, but he said that expanding into prime loans remained a goal.
Companies have wide leeway to advertise as they see fit, but Ameriquest has been in a spotlight as it moves to settle an inquiry into its lending practices by attorneys general and regulators in 30 states.
The company has set aside $325 million toward a resolution, but the absence of a final agreement has sidelined, at least temporarily, the nomination of Ameriquest Chairman Roland E. Arnall as ambassador to the Netherlands. The Senate Foreign Relations Committee last week delayed a confirmation vote, saying Arnall should first resolve the investigation of Ameriquest by the states.
The company's ad campaign is remarkable at least in part because sub-prime lenders have traditionally targeted customers with billboards, late-night TV ads or mailers with no-nonsense pitches to get prospects on the phone with loan agents, often with telltale cues such as "bad credit OK."
As an extra marketing layer, Ameriquest's branding campaign is an expensive proposition, said Bruce Miller, vice chairman of Dailey & Associates Advertising in West Hollywood who has worked on ad campaigns for several financial institutions including sub-prime lender Aames Home Loan.
Financial statements obtained by The Times show that privately held Ameriquest Capital's advertising and marketing budget jumped from $65 million in 2002 to $365 million in 2004.
By contrast, No. 1 mortgage lender Countrywide Financial Corp. of Calabasas had more than four times the mortgage volume but spent about half as much -- $172 million -- on advertising and promotion.
Much of the spending by Ameriquest, including the sports sponsorships, direct mailings, and payments to the Rolling Stones, falls outside traditional ad categories such as newspapers, television and radio. But that mainstream spending also is enormous -- $145 million last year including $18 million by Ameriquest's sister company, Argent Mortgage Co., according to TNS Media Intelligence, a market research firm.
