Ameriquest Press Release 1/23/2006

ORANGE, Calif., January 23, 2006 – ACC Capital Holdings Corp (“ACCCH”), parent of Ameriquest Mortgage Co., announced today an agreement with a committee of state Attorneys General and financial regulators representing a final resolution to an inquiry about Ameriquest’s lending practices. Under the agreement, Ameriquest will implement a series of measures to enhance the company’s business practices while continuing to help consumers meet their mortgage financing needs.
The company acknowledged no wrongdoing and there are no restrictions or limitations on the company’s licenses.
As part of the agreement, ACCCH subsidiaries Ameriquest Mortgage Company, AMC Mortgage Services and Town & Country Credit Corporation (referred to collectively as “Ameriquest”), will strengthen their standards, policies and practices, taking a number of steps to better inform consumers and to eliminate potential conflicts of interest in the loan origination and funding processes.
“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, chief executive officer of ACCCH. “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.”
Under the agreement, ACCCH has allocated $295 million over the next year to compensate borrowers. The funds will be designated for borrowers who obtained loans from Ameriquest between January 1, 1999 and December 31, 2005. In addition, the company will provide $30 million to reimburse the states for legal fees and other costs related to the states’ inquiry. Distribution of the funds will be handled by an independent settlement administrator.
In addition to its financial commitment, the specific steps Ameriquest has agreed to take include:
Ensuring that borrowers receive a simple one-page form clearly describing all loan terms at least three days before closing.
Centralizing the appraisal process and instituting random selection of appraisers.
Requiring sales associates to follow approved scripts to describe loan terms and conditions and ensure that competitive claims regarding interest rates are accurate.
Implementing measures requiring customers to sign a statement at closing certifying that the information they provided to Ameriquest regarding their stated income is true and correct.
Ensuring that Ameriquest will only refinance a non-prime loan if there is a benefit to the borrower.
Using third-party closing agents to help prevent conflicts of interest.
Ameriquest also implemented a series of policies and programs as part of its best practices efforts prior to the agreement. This agreement reaffirms those enhancements, including:
A mystery shopper program, which the company implemented in 2005, that independently verifies that branch associates are adhering to company policies and procedures.
A “Same Rate” or risk-based pricing policy that the company established in 2003, which prices loans by a precise formula-driven model that uses objective measures of an individual’s credit worthiness.
A quality-based compensation system that the company implemented in 2005, which promotes the fair treatment of customers by including customer satisfaction and loan quality measures in the employee compensation equation.
A whistleblower program that the company launched in 2004, which encourages associates to report inappropriate conduct.
Spanish language loan documents and "Spanish certified" associates available in designated branches to assist Spanish-speaking consumers, continuing a program which has been in place since 2004. The company will now also provide loan documents in any other language in which it advertises in the future.
In addition to the company’s internal monitoring, the agreement calls for the creation by the states of a compliance committee, which will oversee the agreement. An outside firm will also be hired to monitor compliance with the agreement over the next five years.
“Ameriquest worked cooperatively with the states to develop an agreement and ongoing policies that will serve as a model for the industry,” said Florida Attorney General Charlie Crist. “We applaud their willingness to engage with us constructively on these issues and we urge others in the industry to adopt these improved practices.”
“We’ve always had zero tolerance for inappropriate practices,” Mital said. “Where we’ve found mistakes, we’ve worked hard to fix them. We’re now putting in place even more stringent standards and institutional safeguards to ensure that our practices meet or exceed our customers’ expectations. At the same time, Ameriquest remains on a solid financial footing and we’re well positioned to move forward with our plans for disciplined, orderly growth. In fact, we believe these customer friendly measures will help us earn the trust of even more consumers and allow us to compete even more effectively for their business.”
“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.”
“Ameriquest is proud of the role it has played in bringing down the cost of home loans and making credit available to millions of Americans,” said Adam Bass, senior executive vice president and vice chairman. “We will continue to help improve the quality of peoples’ lives by being a national leader in providing home financing options that meet their needs.”