Spitzer/Cuomo announce more than 13,000 New Yorkers to receive settlements in Predatory Lending Case

[Robbien]

Source: New York Office of Attorney General

New York, NY (December 24, 2007) Governor Eliot Spitzer and Attorney General Andrew M. Cuomo today announced that more than $18 million is being distributed to 13,686 New Yorkers eligible to receive restitution as a result of a $325 million settlement with Ameriquest Mortgage Co. and its subsidiaries stemming from predatory loan practices. Predatory and illegal lending practices that Ameriquest may have used to encourage homeowners to refinance mortgages included misrepresenting and failing to disclose loan terms, charging excessive loan origination fees, and inflating appraisals to qualify borrowers for loans.

. . .

“Through their aggressive use of deceptive and predatory lending practices, Ameriquest both exploited borrowers and contributed to today's staggering crisis in the mortgage industry,” said Attorney General Cuomo. “These funds will help undo the damage that Ameriquest caused to thousands of New Yorkers.”

The agreement, which was announced in January 2006, required Ameriquest to pay the states $295 million for restitution divided into two separate funds: a $175 million fund to be distributed under a nationwide formula to most consumers who received an Ameriquest loan between January 1, 1999 and April 1, 2003; and a $120 million fund to be divided among the states based on the volume of Ameriquest loans made in each state, to be distributed, at each state’s discretion, to consumers who received an Ameriquest loan between January 1, 1999 and December 31, 2005.

. . .

Checks were mailed to participating consumers on Thursday, Dec. 13th and Friday, Dec. 14th. Distribution of checks may take up to one week, so participating consumers should have received their checks before today

The New York Attorney General’s office, along with Attorneys General from Iowa, California, Illinois, and Washington, and the New York Banking Department led the multistate investigation of Ameriquest.

Read more: http://www.oag.state.ny.us/press/2007/dec/dec24a_07.html

[woundedkarma]

1. I'm sorry but...

$1000 isn't going to help these people.

It doesn't even come close to covering how badly these practices have screwed people. PEOPLE HAVE LOST THEIR HOMES.

[McCamy Taylor]

2. The money is never about helping the people or actually reimburisng their losses.

I have received several such checks for being screwed by HMOs as a provider and none of the checks is even a fraction of what the HMOs pocketed.

I think it is more about teaching them that someone may come after them in court one day, when they least expect it--and are in the worst financial shape to handle the legal expense which is the real killer when the government sues you.

Better to send checks for $1000 to each victim than for private plaintiffs attorneys to pocket half of everything--after their expenses.

[Donnachaidh]

3. would you have rather nothing had been done? n/t

[Occulus]

4. If the company in question was worth enough money

then one could argue that nothing substantial was accomplished with this ruling.

How much is this company actually worth, anyway? Knowing that would go a long, long way toward knowing whether this amount was enough, too onerous, or (as I think likely) far, far too low to send any sort of meaningful message to the company's board of directors other than "these suits are a cost of doing business".

I'm beginning to believe we need a corporate death penalty. Hey, if they want to be persons so badly, then.....