After more than 18 months, Ameriquest Mortgage Co. is finally close to a settlement of predatory lending charges, a deal that would clear the way for the company's founder, Roland Arnall, to become U.S. ambassador to the Netherlands.
"It's finally getting close, and I think we'll conclude it in mid-to-late January," says Iowa Attorney General Tom Miller, the leader of a task force of AGs from 33 states and the District of Columbia that has been probing the company. Ameriquest is expected to pay as much as $325 million to put the matter to rest.
President Bush appointed Arnall, a 66-year-old Holocaust survivor and Ameriquest's principal shareholder, to the diplomatic post in July, but the Senate has been loath to confirm him while the investigation was active.
"I do think we should send people who are not under a cloud of investigation. Mr. Arnall -- fairly or unfairly -- finds himself in that position," Senator Chuck Hagel said in a statement in November. Hagel, a Nebraska Republican, joined Democrats in holding up the vote.
Although details could change, Orange, Californiabased Ameriquest, the nation's biggest subprime lender, is expected to pay some $295 million in restitution to borrowers and $30 million to cover the cost of the state investigations. Ameriquest allegedly promised attractive loan terms only to substitute them with higher rates, among other offenses, according to Miller. The predatory- lending settlement would be second in size only to the $484 million agreement between Household International and 50 states in 2002.
Paris-born Arnall, who moved to Canada after World War II and to California in the late 1950s, is among the 100 wealthiest Americans, according to Forbes magazine, with a fortune estimated at some $3 billion. He has been one of Bush's biggest campaign contributors in recent years. "We're hopeful that when the agreement is completed, it will be a model for the industry," says Ameriquest spokesman Chris Orlando.
