Utah case alleges loan unfairly forced on borrower
By LISA D. BURDEN
2/24/2006

Ameriquest Mortgage Co. is facing a lawsuit filed in Utah's federal court brought by an elderly woman who claims company representatives cajoled her into obtaining a loan at double the interest rate she could have gotten from her credit union. But the subprime lender sees no merit in her allegations.

Marian Paul alleged in court documents that, after she contacted the ubiquitous lender in March 2005 about getting a loan for $4,000, two Ameriquest representatives came to her house unannounced at 10:30 p.m. and, with only one light in the house working, convinced her that she would save money by getting a loan through the company.

Paul, a 73-year old Native American widow, said that one of the representatives told her the interest rate on the loan was for one-half of what she could have gotten from her credit union.

But there are no facts in Paul's complaint to support her allegations that she could have received better terms elsewhere, Ameriquest spokesman Chris Orlando told MortgageDaily.com. The only accurate way to compare terms that a borrower could have received is to compare loan offers generated from a completed application process, he explained.

Paul, who has cataracts, also claimed that when she asked the company's representatives to leave the documents so that her daughter could read them to her, the representatives refused, claiming that the documents had to be signed that night.

Instead of a small, low-interest loan, Paul said she was given a $60,000 loan at much worse terms than she could have gotten elsewhere. She said that Ameriquest paid off a lower-interest loan and an automobile loan, neither of which she wanted the company to pay. Paul also claimed in the court documents that, in addition to the unfavorable interest rate, she paid "exorbitant loan charges" including an origination fee of $2,372, a document preparation fee of $626 and a $200 notarization fee.

Now, less than a year after she obtained it, the loan is in default.

"Paul is a victim of Ameriquest's unfair and deceptive lending practices, which have been intentionally and systemically engaged in by Ameriquest," Russell Cline, Paul's attorney said in the complaint.

Paul wants the loan canceled. She is seeking attorney's fees and punitive damages, alleging that Ameriquest acted in "willful and wanton disregard" for her rights.

The lawsuit follows last month's agreement to pay $325 million to 240,000 Ameriquest customers from 1999 to 2005 in a multi-state settlement. Ameriquest also reportedly agreed to make changes to its lending practices. The settlement calls for the appointment of an independent monitor to oversee Ameriquest's compliance with the settlement.

Orlando declined to offer further comment, citing the company's policy of not commenting on matters that are in litigation.

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