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Ameriquest Mortgage Co., the nation's largest sub-prime lender, has agreed to pay $295 million to consumers and make sweeping reforms of practices that states alleged amounted to predatory lending. More than $2 million of that amount is expected to go to Louisiana customers.The company also will pay a total of $30 million to the 49 states and the District of Columbia that are participating in the settlement agreement for costs of the investigation and consumer education and enforcement.Doing the right thing for the people we serve has always been one of our core values. We regret those occasions when our associates have not met this ideal to our customers' expectations, said Aseem Mital, CEO of ACC Capital Holdings Corp., the parent company of Ameriquest. This agreement is good for consumers and fair to the company. It provides a framework for new lending policies that improve and enhance our ability to serve our customers and are a model for the industry.Consumers do not need to take any action at this point to pursue recoveries - they will be contacted later by states in the months ahead as specific recovery terms and plans are determined.Of the $295 million in restitution, $175 million will be distributed in a nationwide claims process to eligible Ameriquest customers who obtained mortgages from Jan. 1, 1999, through April 1, 2003 with payments based on a formula set by the settling states.Another $120 million in restitution will be allocated to the settling states based on the percentage of total dollar amount of Ameriquest loans held by consumers in each state and will be used to compensate Ameriquest customers who obtained mortgages between Jan. 1, 1999, and Dec. 31, 2005. Each settling state will determine which customers in its jurisdiction are eligible to receive money from this restitution fund.A rough estimate is that Louisiana consumers may receive about $2.68 million in payments as a result of the settlement, but actual individual state's total shares of payment funds have not been determined. In the agreement, Ameriquest denies all of the states' allegations but agreed to a battery of new standards to prevent what the states alleged were unfair and deceptive practices.Our view was that Ameriquest employees deceived consumers as part of high- pressure tactics to sell mortgage refinances, said Louisiana Attorney General Charles Foti. We believe these high-pressure sales tactics were used to reach desired sales levels and high monthly individual sales quotas, and were induced by a lopsided commission structure. We believe this agreement will correct these practices.The settlement with the states includes ACC subsidiaries Ameriquest, Town & Country Credit Corp., and AMC Mortgage Services, Inc., formerly known as Bedford Home Loans. Under the agreement, Ameriquest is required to:* Provide the same interest rates and discount points for similarly-situated consumers.* Not pay sales personnel incentives to include prepayment penalties or any other fees or charges in the mortgages.* Not encourage prospective borrowers to falsify income sources or income levels.* Provide accurate, good faith estimates.* Limit prepayment penalty periods on variable rate mortgages.* Not engage in refinancing solicitations during the first 24 months of a loan unless the borrower is considering refinancing.* Use independent loan closers.* Adopt policies to protect whistle-blowers and facilitate reporting of improper conduct.Ameriquest already has implemented several of these requirements. The commitment of Ameriquest's management team to get to the root of our concerns was clear from day one, said New Mexico Attorney General Patricia Madrid. This agreement is the result of a collaboration that will benefit consumers by increasing and improving the information borrowers receive about their loans and strengthening the lending process.Law enforcement officials and regulators began an investigation of Ameriquest after receiving hundreds of complaints from customers across the country. The ensuing investigation uncovered consumer protection problems in areas governed by the settlement. The alleged improper practices included: inadequate disclosure of prepayment penalties, discount points and other loan terms; unsolicited refinancing offers that did not adequately disclose prepayment penalties; improperly influenced and inflated appraisals; and encouraging borrowers to lie about income or employment to obtain loans.