The Texas Rangers play on Ameriquest field but 1/3 of their employees were terminated today [WaPo] raising concern whether the sub prime lender can continue. Hat tip to Bankrate.com. Frankly, with mortgage volume down significantly, I’d see this more as a cost cutting move.
The founder of Ameriquest was recently nominated to be Ambassador to the Netherlands by President Bush which brought additional scrutiny and could have added to the probability that the firm would be investigated and fined.
The parent company of Ameriquest Mortgage Co., the mortgage lender that this year reached a $325 million settlement with regulators and prosecutors over allegations of predatory lending practices, yesterday announced a reorganization that will shutter all its 229 retail branches and lay off 3,800 employees nationwide._
More than 240,000 borrowers will receive compensation from the settlement to make up for losses they suffered after getting loans from Ameriquest. The company also agreed to make major changes in how it does business.
Frankly, the extent of the settlement makes me wonder how they can overcome the stigma of such activity, and how the founder can represent our country. Its interesting how things worked out. I would imagine the regulators are watching Ameriquest closely. I don’t see how you can pay that kind of settlement and have much of any safeguards in place for future abuse or be able to change the corporate culture quickly enough.
With rising mortgage rates, and declining application volumes, there will be some cost cutting in store for all lenders and real estate related employment. Still, other job opportunities remain [BW].