Ameriquest spent $20 million to lobby against subprime legislation
Subprime lenders spread lobbyists, cash, tickets around government Nick Juliano
Published: Monday December 31, 2007
Rolling Stones tix among gifts spread to lawmakers
As state governments around the country were trying to regulate subprime lending practices that critics say were responsible for this year’s mortgage meltdown, the subprime industry was spreading cash and gifts to lawmakers in a dozen states.
The Wall Street Journal’s Glenn Simpson details the case of Ameriquest Mortgage Co., reporting the company worked with a married pair of DC lobbyists to spread more than $20 million in political donations in states considering subprime regulations. Ameriquest also handed out stacks of Rolling Stones tickets to lawmakers in eight states as well as to the campaign of California Gov. Arnold Schwarzenegger.
“Home loans made by Ameriquest and other subprime lenders are defaulting now in large numbers, roiling global credit markets and sparking debate about whether regulators and lawmakers should have anticipated the mess and taken action,” Simpson reports. “A close look at Ameriquest’s lobbying and political donations shows how the subprime industry maneuvered to defeat legislation that might have contained some of the damage.”
The industry lobbying focused on state governments since at least 2001. At the federal level, members of the until-recently GOP Congress—who had received $645,00 in donations from subprime lenders—didn’t seem too interested in enacting new oversight of the industry.
“What seemed to be developing in the states was that there was going to be a wave of legislation,” lobbyist Wright Andrews, who coordinated the industry’s lobbying operation with his wife, Lisa, told Simpson.
Although Andrews didn’t directly lobby for Ameriquest, according to Simpson, he “ran three different subprime-industry trade groups: the National Home Equity Mortgage Association, of which Ameriquest was a member; the Coalition for Fair and Affordable Lending, which spent $6.3 million lobbying against state laws before it dissolved earlier this year, according to federal filings; and the Responsible Mortgage Lending Coalition.” Lisa Andrews was a senior vice president in Ameriquest’s lobbying division from 2003 to 2005.
Ameriquest’s state-level lobbying focused on Georgia after the state passed its Fair Lending Act in 2001. The act required lenders to provide a “tangible net benefit” to borrowers when it refinances loans less than five years old.
Ameriquest became “very, very engaged,” in working, along with other banks and mortgage houses, to get the law changed, Georgia state Sen. Vincent Fort told Simon. Fort, the author of the law, said he accused an Ameriquest lawyer of victimizing poor minorities, who made up the bulk of subprime borrowers.
After the law was passed, Ameriquest and other lenders began spreading campaign donations and tickets to lawmakers there. Less than a year later, in October 2002, Ameriquest announced it would state doing business in the state unless the law changed; the ratings house Standard & Poor’s Corp. said it would stop rating mortgages there.
The subprime industry essentially said it would no longer do business in the state until the law changed, Simon reports. Georgia’s state House and Senate voted within months to remove the “net benefit” provision Ameriquest objected to.
The industry worked together to roll back a similar effort in New Jersey. Simon reports that two of the recipients—Republican Gerald Cardinale and Democrat John Adler—introduced a bill “to make changes sought by the industry,” in December 2003, less than two months after receiving Ameriquest donations. The company gave Cardinale $2,200 in October 2003 and Adler $1,200 the next month.
The lawmakers recollections of the time period was far fuzzier when Simon asked them about the proposal’s genesis.
“I don’t remember ever being lobbied by Ameriquest,” says Mr. Cardinale. “I do recall that we were trying to make it easier for folks to be able to access funds. And, in general, I feel it is a good thing for us to remove barriers to people being able to buy homes.” He says he doesn’t remember receiving any contributions from Ameriquest. “You guys think we know all of our contributors, but that’s usually on a staff level. I don’t frankly know who Ameriquest is.”
Adler also didn’t “recall” ever meeting with Andrews firm.
As the Wall Street Journal documented how industry-influenced governments failed to head-off the negative impacts of the subprime lending crisis, new market data revealed that sales of new homes plummeted to their lowest level in more than 12 years.
“I think you can classify what we are seeing in the housing market as a crash,” said Mark Zandi, chief economist at Moody’s Economy.com. “Sales and home prices are in a free fall. The downturn is intensifying.”
If you google “Ameriquest, lobbying, subprime” you’ll get a ton of links.
I’m not in favor of the legislation enacted or discussed, it’s mostly BS. These legislators are either dimwitted or corrupt. I propose only ONE new law, to be applied to ALL companies doing business with consumers.
The ONE new law we really need:
1) impose statutory damages of $1,000 for each lie or deception by businesses dealing with consumers and treble damages for willful violations.
2) allow the recording of calls by all consumers for business calls, preempting state laws.
3) revocation of a company’s business license for frequent violations, from temporary to permanent license revocation.
This would take care of MOST problems with mortgages AND anything else.
Arizona passed a law revoking the business license of companies who employ illegal aliens for up to 10 days for the first violation, effective 1/1/08. Already many companies have laid off their undocumented employees. Notably, some fast food chain already announced that they would stop expanding in Arizona and instead expand in Texas. And that’s why you need a FEDERAL law.
The possibility of losing the license would stop the lies real fast and any employees acting against corporate policy would be fired. And instead of battling consumers in litigation, the corporations would quickly SETTLE. Of course they can take the settlement out of the employee’s salary or final pay check or even sue the lying employee for any deficiency.
Collector Focus did NOT fire James Hurd. Instead they DEFEND him and claim that it was legal to extort the $250 I didn’t owe by threating to report the disputed bogus debt to the credit bureaus. You bet they would change their training manual if they could lose their license. I can’t wait to post the pretrial order with their arguments, due this Friday.
Having observed how PRO SE consumer litigants have successfully sued thousands of junk faxers, I know that MILLIONS would start recording the calls and SUE for being deceived or lied to.
The only “problem” with this law is that it would seriously impact on the economy.
If people aren’t lied to and deceived, they won’t buy the crap.
I’ve sued Ameriquest for lying to me and federal judge Neil Wake saw nothing wrong with lies, whether by Ameriquest, Capital One or anyone else. Fortunately, I was able to prevail on some TILA or FCRA claim, something technical and complicated, that consumers normally don’t even know about and I got $5k in a settlement with Ameriquest.
The legislators do NOT think that it’s wrong to lie. That’s of course because they lie all the time.
Posted by Christine on 01/02/2008 at 01:20 PM
2004 Suit (credit limits, credit reporting - on appeal) • Ameriquest Mortgage - incompetent spammers • (0) Comments • Permalink
