AUSTIN -- Texas Attorney General Greg Abbott and his California
counterpart Jerry Brown brought home a nice hunk of bacon from a July 12 multi-state settlement over 'predatory lending'.
The nation's two largest states between them got $72 million (21
percent) of the total national $325 million settlement announced today
with a family of mortgage providers controlled by ACC Capital Holdings
(ACH). It's ACH's second major settlement in 18 months.
The two states comprise some 15.5 percent of the U.S. adult population
of 217.8 million, according to a 2005 U.S. Census Bureau report.
Abbott said Texas will get $21 million (6.5 percent) from
Ameriquest Mortgage Co., Town and Country Credit Corp. and AMC
Mortgage Services. He accused them of running "predatory lending
schemes that lock would-be homeowners into a seemingly endless cycle
A multi-state lawsuit claimed the companies failed to disclose full
terms of their mortgage offerings over the 1999-2005 period. These
included details about adjustable v. fixed rates, prepayment
penalties, refinancing and appraisals.
In late January 2006, ACH settled for $295 million a similar suit
brought by state attorneys-general against its subsidiaries over
allegedly sharp sales practices. The three agreed in future to clarify
loan terms, verify income statements and use only third-party closing
agents, among other things.
California received a $51 million - 15.6 percent - share of the latest
total settlement amount with ACH, Brown stated in a separate release.
Brown's release said about 78,000 Californians would begin receiving
restitution checks averaging $812.15 each. Up to 21,000 Texans could
be eligible for payments of $1,000 or more each.
Abbott and Brown both warned those participating in their restitution
schemes that they were also relinquishing their rights to bring
individual lawsuits against the Ameriquest group.