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Lawsuits accuse lender of fraud

Ameriquest's Tampa office falsified documents and lied about interest rates and fees, five Pinellas residents say.

By HELEN HUNTLEY
Published April 6, 2005

Five Pinellas County residents who went to Ameriquest Mortgage Corp. for loans say the company's Tampa office used inflated appraisals, lied about interest rates and fees and falsified documents to pump up business.

"This is a clear case of Ameriquest Mortgage Corp. taking advantage of new homeowners or novice borrowers," said George Soroka, who took out mortgages to buy two Largo properties and filed one of three customer lawsuits against the company pending in Hillsborough Circuit Court. The others were filed by Clearwater residents Dawn McLaughlin and Brian Fichtner, who borrowed from Ameriquest to buy a house, and Maria Robinson and Robert Hughes of Clearwater, who wanted a loan but didn't get one.

They aren't the only ones making such claims. The Los Angeles Times reported that lawsuits in at least 20 states claim that Ameriquest used fraud, false documents and bait-and-switch tactics. Twenty-five states, including Florida, are questioning the firm's practices.

Ameriquest acknowledges there have been problems, but it says the company is the victim.

"It's not in the company's best interests to have inflated appraisals, misrepresentation of interest rates and fees or income," a spokesman said. He said the company ended relationships with some vendors and fired an unspecified number of employees when problems were discovered in Tampa last spring. In addition, he said the company is "working with federal law enforcement to address problems facing the industry."

Many of the practices mentioned in the complaints would boost business and thus income for employees and the company. But in the long run, they could cost the company if borrowers default because they don't have enough income to make payments and the property is worth less than the loan.

Ameriquest is the nation's largest mortgage lender for people with credit problems.

The Tampa Bay lawsuits say Ameriquest promoted its services to current and would-be homeowners by promising modest interest rates with no loan costs or application fees and offering cash back at closing.

"When the paperwork is presented to customers for signature at closing, the terms are contrary to the terms promised or are concealed," said the suit filed by Robinson and Hughes.

Instead of the "no loan costs" they say they were promised, McLaughlin and Fichtner paid $5,724 in "discount fees" on their $115,000 mortgage.

The lawsuits say Ameriquest and other companies involved in the transactions - appraisers, the title company and the property insurance agency - worked together to benefit Ameriquest and its employees at the borrowers' expense.

Ameriquest could deliver cash back at closing because inflated appraisals and inaccurate income statements made it possible for homeowners to be approved to borrow more than their houses were worth.

Borrowers who owe more than a house is worth generally can't sell their property or refinance the mortgage without coming up with additional cash.

The customers who sued say they obtained documents from other customers that show falsifying documents wasn't an isolated occurrence. An investment account with a $25,456.53 balance was listed as an asset for three borrowers, but belonged to only one of them. They say the Tampa office had an "art department" that doctored documents.

The customers also say the company charged borrowers for expenses they think the sellers should have paid and required borrowers to buy property insurance from a particular agency, then overcharged them.

McLaughlin and Fichtner had a written quote of $809 from Five Brothers Insurance Agency, but they say Ameriquest tried to charge them $1,500 for the policy at closing, reducing the price to $1,169 after they objected. Officials at the insurance agency could not be reached for comment. Ameriquest officials said the company has no relationship with the agency.

The Pinellas borrowers sued without the help of a lawyer and make many arguments the defendants say don't meet legal requirements for bringing a case.

Robinson and Hughes even tried to sue Attorney General Charlie Crist for failing to prosecute Ameriquest. Some complaints have been dismissed and refiled.

Clearwater lawyer Nickolas Ekonomides recently took on the cases and is expected to file amended complaints. He said it would be a month before he would be ready to discuss them.

Information from the Los Angeles Times was used in this report.

[Last modified April 6, 2005, 01:06:15]