Saturday, February 05, 2005

Ameriquest Capital Corp. under investigation: Chairman Roland E. Arnall, developer and financier who helped found Simon Wiesenthal Center in 1977


At 8:53 PM, Blogger jewishwhistleblower said...



Feb. 4 (EIRNS): Ameriquest Capital Corp., the nation's largest sub-prime mortgage lender, has contributed $1.054 million to California governor Arnold Schwarzenegger, and has spent more than $200,000 on lobbying in Sacramento since the Governator was elected. "Sub-prime" mortgages are high-cost loans to people with poor credit, and companies such as Ameriquest are known for predatory practices against people desperately trying to save their homes from foreclosure. It is also a last-gasp opportunity lender for home ownership for many poor people.

The Los Angeles Times reports that Ameriquest has been alleged, in a series of lawsuits filed against it, to do virtually anything to make sales, including forging documents, hyping customers' creditworthiness, and offering "juiced" mortgages with hidden rates and fees. The company is headed by Chairman Roland E. Arnall, a developer and financier who helped found the Simon Wiesenthal Center in 1977. Rabbi Marvin Hier, a top official at the Wiesenthal Center, has received several large contributions for the Center from Schwarzenegger, in return for Hier giving Schwarzenegger's father clearance from the charge that he was involved in war crimes. Schwarzenegger's father was a member of Hitler's bloody SA stormtroop in Austria.

The Governator, who just launched an effort to raise $100 million to ram through a raft of fascist policies designed by George Shultz, has been raising money through a pro-business committee, Citizens to Save California. There are charges from consumer groups that Schwarzenegger's personal involvement with the Citizens group - which is co-chaired by the President of the California Chamber of Commerce - violates state law, which prohibits unlimited contributions to committees in which elected officials are actively involved. This law would restrict contributions to $22,300 per donor; at present, the committee is soliciting larger contributions, with the expectation of raising $13 million over the next 8 weeks, to provide funds for referenda that Schwarzenegger has planned.

Ameriquest Mortgage Co. accused of unfair practices
The Orange County Register, Calif.
Knight Ridder/Tribune Business News
February 5, 2005
The Orange County Register (KRTBN)
Feb. 5--Ameriquest Mortgage Co. faces allegations that it misled and overcharged borrowers, falsified loan applications and saddled low-income and minority homeowners with loans they couldn't afford, public records show.

Ameriquest, based in Orange, is one of the nation's largest lenders to borrowers who have tarnished credit histories or other difficulties getting loans.

Among the legal actions pending against Ameriquest: Connecticut banking regulators moved last month to yank lending licenses from Ameriquest and an affiliate, accusing the company of repeatedly overcharging its customers, state documents show.

A suit filed last month in federal court in San Francisco seeks class-action status on behalf of all Ameriquest borrowers. It alleges the company's loan officers have demonstrated a pattern of unfair and illegal practices.

Ameriquest declined to comment on the Connecticut regulatory action or the California lawsuit, citing a company policy of not commenting on pending legal matters. The allegations against the company were first reported Friday by the Los Angeles Times.

"We are a nationwide lender and our goal is to continue to lead the industry through best practices and providing superior products and services," Ameriquest said in a statement. "We hold ourselves to the highest standards and ethical practices, and do not tolerate unethical or improper behavior by our employees or our vendors." Ameriquest is a so-called subprime lender that makes loans for people who have credit problems, heavy debt burdens, or are self-employed. Subprime loans carry higher interest rates and fees than traditional bank loans.

The subprime mortgage industry has been growing rapidly since the mid-1990s.

The Federal Reserve reported that subprime loans grew 25 percent annually from 1994 to 2003. In comparison, overall loan originations rose 17.6 percent. As of 2003, subprime loans made up 8.8 percent of all loans.

Orange County is a hub of subprime lending, with four of the top five lenders headquartered here, according to a Mortgage Bankers Association report from October.

The report said New Century Mortgage Corp. of Irvine is the nation's largest subprime lender, originating more than $23.9 billion of single-family mortgages in 2003. Ameriquest ranked third, at $18.9 billion.

Ameriquest has aggressively sought a high profile. It has plastered its name on everything from blimps to a Texas baseball stadium to the Super Bowl half-time show. And company officials are major political donors.

Ameriquest also marketed itself as a leader in rooting out so-called "predatory lending" practices, which include packing loans with excessive fees and commissions. In 1999, Ameriquest was one of the first subprime lenders to adopt specific lending guidelines designed to eliminate bad practices.

However, Ameriquest has been the subject of far more complaints to the California Department of Corporations than New Century in recent years.

Between 2000 and 2004, consumers filed 134 lending complaints against Ameriquest compared to 39 for New Century, said department spokeswoman Susie Wong.

Wong declined to say whether the department is investigating the complaints against Ameriquest.

In Connecticut, a hearing is scheduled for March 31 on the Connecticut Department of Banking's proposal that 24 lending licenses held by Ameriquest and a subsidiary not be renewed.

Ameriquest has been accused of charging excessive refinance fees from 179 Connecticut customers in the past three years -- 39 of them after the firm settled with the state over similar allegations by agreeing to pay nearly $670,000 in refunds and penalties.

Losing the licenses could mean that Ameriquest would stop offering loans in Connecticut. The company also faces as much as $5.5 million in additional penalties.

In the San Francisco civil suit, Ameriquest is charged with failing to make required disclosures to borrowers, falsifying borrowers' income amounts on loan applications and saddling borrowers with bigger payments than they can afford.

For example, the suit contends that an Ameriquest employee inflated the income on a loan application of Nona Knox, an African-American homeowner in East Palo Alto. The extra income was attributed to a "music academy" purportedly owned by Knox's late husband, although no such academy existed and Knox's husband was not a music teacher.

Allegations of misdeeds are a blow for company with whose executives have been prominent donors to campaigns for state and national political posts.

Ameriquest's co-chairpersons, Dawn and Roland Arnall, each raised at least $200,000 for President George W. Bush's re-election campaign. Another 155 Ameriquest employees and Arnall family members together contributed $242,500.

Ameriquest and three of its subsidiaries contributed $1 million to Bush's inaugural last month.

The company also contributed $100,000 to oppose the 2003 recall of California Gov. Gray Davis before giving $157,400 to the campaign of the man who replaced him, Gov. Arnold Schwarzenegger.

By Andrew Galvin and Jeff Collins

--Be wary of lenders who contact you first -- through mail, e-mail, door-to-door sales or telemarketing solicitations.

--Be suspicious of lenders or brokers who guarantee loan approval regardless of your credit history.

--Beware of offers that are "only good for a short time." Steer clear of lenders who resort to high-pressure sales tactics.

--Be wary of promises to refinance the loan to a better rate in the future.

--Watch out for "hidden" terms, such as penalties for early pay-off of the loan.

--Avoid "balloon" payments -- some loans keep monthly payments down by requiring a big payment at the end of the loan term.

--Make sure the monthly payments are well within your monthly budget.

Source: California Department of Corporations


Headquarters: Orange

Employees: more than 12,000, including affiliates

Branch offices: 270

Loans originated in 2003: $18.9 billion

Ameriquest Mortgage Company
February 2, 2005
Hoover's Company In-depth Records


On a quest for the American Dream? Ameriquest Mortgage wants to help you fulfill it. The company is one of the nation's largest specialty lenders, originating, purchasing, and selling retail and wholesale, prime and subprime mortgage loans secured by one- to four-family residences. The company is a seller and servicer for Fannie Mae and Freddie Mac, and a non-supervised HUD mortgagee. Additionally, it offers debt consolidation and personal financing loans. Ameriquest operates through 270 retail offices throughout the country, more than 40 of which are in its home state of California. The company is a subsidiary of Ameriquest Capital Corporation.

Record low interest rates plus strong home sales have equaled a major boom in business for Ameriquest. The company is pursuing ambitious expansion plans in the Midwest, on the East Coast, and in California, hiring thousands of employees nationally.

In early 2004, on the heels of speculation that Ameriquest tripled its origination volume from 2002 to 2003, the company announced it's expanding into the prime marketplace. And its name is seemingly everywhere, including the Texas Rangers' stadium, now called "Ameriquest Field in Arlington."

Ameriquest owns Argent Mortgage Company, LLC, Ameriquest Mortgage Securities, Inc., Long Beach Acceptance Corporation, and Olympus Mortgage Company.

Roland Arnall, owner of the company's parent, is a widely recognized and generous donor to the Democratic Party. In fact, party pal and former governor of California Gray Davis actually officiated at Arnall's wedding in 2000.


Ameriquest Mortgage was founded in 1980 as Long Beach Savings and Loan. In 1994, it ceased depository operations and began concentrating solely on its mortgage banking business.

In 1997, Ameriquest sold its wholesale operations and reorganized its retail lending and serving operations under its current name.

Finally, in January of 2003, Ameriquest reorganized its wholesale lending division, launching Argent Mortgage Company, LLC, a wholly-owned subsidiary, that originates a substantial number of the company's mortgage loans.


CEO, Wayne Lee

SEVP and Vice Chairman, Adam J. Bass

President and COO, Joy Schaefer

CFO, John P. Grazer

Managing Director, Corporate Affairs and Industry Relations, Paul Neal

VP, Federal and Regulatory Affairs, Rodrigo J. Alba


1100 Town and Country Rd.

Orange, CA 92868-4600



United States





Ameriquest Mortgage is headquartered in California, and employs more than 12,000 people in 270 branches in 35 states.

Ameriquest Mortgage Insurance Services (contract insurance broker)
Argent Mortgage Company, LLC
Long Beach Acceptance Corporation (auto financing company)
Olympus Mortgage Company
Town & Country Credit Corporation (operates as a trustee company)
Town & Country Title Services, Inc. (title company)


Aames Financial



Countrywide Financial

H&R Block

HSBC Finance


New Century Financial

Washington Mutual

Wells Fargo


Company Type: Subsidiary



Long Beach Acceptance Corp.


Financial Services


Mortgage Banking & Related Services

The Unorthodox Rabbi
By Invoking the Holocaust and Bullying the Establishment, Marvin Hier Has Made The Simon Wiesenthal Center the Most Visible Jewish Organization in the World
Los Angeles Times
July 15, 1990
Author: SHELDON TEITELBAUMTOM WALDMAN; Sheldon Teitelbaum, a frequent contributor to The Times, is an L.A. correspondent for Cinefantastique. Tom Waldman regularly covers Los Angeles politics for California Journal and other publications.Times Magazine Desk

LAST YEAR, WHEN the Berlin Wall fell and the word reunification was murmured in the halls of power, the American Jewish community held its breath. Nobody had to be reminded of what happened to European Jewry the last time Germany was one. Reluctant to risk sparking world ire by opposing reunification while television transmitted dramatic pictures of the decimated Berlin Wall, most American Jews were content to let the British, French, Poles and Soviets express concern on their own behalf. Not so Rabbi Marvin Hier. The 51-year-old dean and founder of The Simon Wiesenthal Center in Los Angeles quickly fired off a missive to West German Chancellor Helmut Kohl articulating his own fears, and those of the Jewish community.

"I must tell you I am not among those in the cheering section applauding the rush towards German reunification. . . . You are undoubtedly aware, Mr. Chancellor, the great fear that German reunification brings to the community of victims of Nazism. . . ."

Kohl responded, albeit coolly. "The vast majority of young people in Germany are fully aware of the inestimable value of a free democracy. . . . Relentless political measures to combat right-wing extremism will continue in a united Germany. . . ."

Hier wasted no time offering the exchange of letters to the New York Times, turning Kohl's response into a public statement of political policy, putting The Wiesenthal Center on the front page once again and, not incidentally, making Hier himself look like the leader of American Jewry.

Which he may well be. By concentrating on the Holocaust and hyping the threat of anti-Semitism, Hier has, in the span of 13 years, turned his brainchild, The Wiesenthal Center, into the fastest growing, highest-profile Jewish activist organization in the world today. He has certainly become America's most fearless public enemy of aging Nazis, youthful neo-Nazi skinheads and those Jewish soft-headed naifs who don't perceive anti-Semitism an as imminent danger.

Through the center's offices in Toronto, Paris and Jerusalem, Hier keeps an endless vigil against anti-Semitism in world politics, international business and even rap lyrics: It was Hier's second-in-command, Rabbi Abraham Cooper, who last year condemned Professor Griff of the rap group Public Enemy for its pronounced anti-Semitism and gave its leader Chuck D. a much-publicized tour of the center's Holocaust Museum. This year, The Wiesenthal Center forced various European airlines, including Ai r France and British Air, to stop omitting Israel from the maps they had printed for their Middle East in-flight publications.

Even more celebrated is the center's pursuit of former Nazis. Last year, it was instrumental in the capture of former S.S. officer Josef Schwammberger in Argentina. Hier was credited with bringing world attention to Raoul Wallenberg, the Swedish diplomat who had selflessly rescued thousands of Hungarian Jews during World War II. Hier and his center were also key figures in last year's protest against the location of a Carmelite convent at Auschwitz.

Most recently, Hier's attentions have been focused on the increasing incidents of anti-Semitism in Eastern Europe; the center has people in various countries working to separate fact from rumor. After a trip to Poland a few weeks ago, Hier met with Czechoslovakian President Vaclav Havel to discuss Jewish concerns. Havel assured Hier that he considered the apparent resurrection of anti-Semitism "a plague and a scourge" and pledged to do what he could to quell it.

In the process of gaining such influence and prestige, Hier has stepped on more than a few toes. An Orthodox rabbi from New York's Lower East Side, he came to Los Angeles in 1977, by way of Vancouver, to build a yeshiva. What this city got instead was a world-renowned Jewish-defense agency. And, whether it likes it or not, Los Angeles also got Hier, a shrewd and canny operator who, in his subsequent pursuit of success and power, has managed to alienate many of the city's established Jewish organizations, including the Jewish Federation Council, the umbrella organization for the city's Jewish agencies, and the B'nai B'rith Anti-Defamation League.

Hier is an anomaly within the Los Angeles Jewish scene. He is Orthodox where most leaders are assimilated. He is confrontational where they are loath to publicly acknowledge discord; Hier will speak out against his own in the mainstream press while other Jewish leaders prefer to voice their differences only within the community. He is cantankerous and blunt where most are polished, street-wise and suspicious where many are reserved.

"We are very naively optimistic," says Hier of his fellow Jews. "We're always looking for the sunshine. Jews say they feel so secure in America. This is such a wonderful country--and it is. But they have lost all touch with reality. Things could change."

Most important, Hier remains unfettered by the bureaucracies that keep the others hidebound; he plays by his own rules. And his marked Lower East Side accent, his Orthodox regalia and his refusal to bow to secular trends make him a constant reminder of exactly what many local Jewish leaders, with their tans and Southern California cadence, wanted to escape when they, or their predecessors, moved west.

"Marvin Hier and the center will always cry anti-Semitism," says a renowned scholar whose previous criticism of Hier's use of the Holocaust drew Hier's wrath. "And they always make sure their name is spelled right."

Yet he has apparently become something of a folk-hero among the city's 700,000 Jews; the center is perpetually deluged by $10 donations from even the most non-observant. Last year, when many other Jewish organizations had to cut corners and go begging, the center pulled in $9.7 million in contributions, and another $5.3 million for its new Museum of Tolerance (scheduled to open next year adjacent to the center on Pico Boulevard). And Hier has powerful friends who might withhold their significant contributions to many of the city's other Jewish organizations if they felt it would benefit, or avenge, him. Hier knows this. In all these ways, he has used his muscle to become one of the most imposing figures in world Jewry.

"Rabbi Hier," says Israel Prime Minister Yitzhak Shamir, "is one of the foremost spiritual leaders in the United States, and in the entire Jewish world."

THE TENSION BETWEEN Hier and the Jewish Federation Council reached new heights last November when Prime Minister Shamir refused to reschedule his visit to Los Angeles after he was told that federation bigwigs would be out of town. But Shamir made time for Hier; the two had a two-hour heart-to-heart schmooze in Hier's study. The symbolic blow was soon returned. A few months later at federation headquarters, former federation president Stanley Hirsch buttonholed David Peleg, a high-ranking official from the Israeli Embassy in Washington, who had just finished briefing ranking members on "the Situation" in Israel. According to several onlookers, including former Anti-Defamation League executive Hyman H. Haves, an angry Hirsch loudly protested Shamir's scheduling, insulted the prime minister's height and said, in effect, that the next time Shamir wanted contributions or financial support, he could forget the federation and go straight to his friend Hier. (Peleg confirms there was a public disagreement; Hirsch denies being there.)

Never has anyone with such genius for publicity headed a Jewish organization in Los Angeles. Hier, a slight, dark-suited, fedora-donning rabbi, has regularly pulled end-runs around the city's established Jewish agencies and organizations. Hier has accrued unprecedented clout in the Legislature, on Capitol Hill, in the city's boardrooms and even in Hollywood. He has so effectively mastered the art of headline-grabbing that the federation, insiders say, has trouble getting comparable publicity, even from its own house organ, The Jewish Journal.

"Success is not a crime," says Hier. "It's not a sin to be successful. My style is you take a point of view. The worst thing in the world is to go to a football game and see both teams refuse to move off the 50-yard line. You'll leave after five minutes."

He ignores all charges of sensationalism and designs the center's fund-raising mailings with great marketing savvy. A typical piece notes that the head of a little-known Canadian fringe party seeks a "constitutionally racist state," a rock concert involving neo-Nazis and skinheads held near London included a song denying the existence of the Holocaust and a Cairo newspaper alleges that Israel is exporting AIDS to Egypt.

Not everyone appreciates Hier's tactics. Some accuse him of throwing oil on the flames of anti-Semitism to scare people into opening their wallets to The Wiesenthal Center. Hier, however, cares little about community approval. Though Orthodox in his religion, he employs highly unorthodox tactics, including riding roughshod over the established channels and methods of the Jewish community. He openly courted Republicans before it was fashionable in Jewish circles--to Hier, political party is incidental, recognition for his center is everything. He voted for Ronald Reagan for President, Tom Hayden for the Assembly. He even cultivated a friendship with Menachem Begin when the former Israeli prime minister was still considered tref , or unclean.California Legislature for its $46.7-million Museum of Tolerance, several Jewish leaders complained bitterly--but not publicly. (The center will also receive $5 million from Washington, through legislation sponsored in the House of Representatives by Dem ocratic Congressman Henry A. Waxman.)

Politicians eager to capture Jewish votes and money regularly visit the center--in recent years the center's guest book has been signed by President Bush, Sen. Ted Kennedy, gubernatorial candidates Dianne Feinstein and Pete Wilson and other luminaries. The massive federation headquarters is all but ignored.

"They talk about a recent improvement in relations," says the liaison to the Jewish community for a prominent legislator, "but I can tell you that Hier, the federation and the ADL (B'nai Brith's Anti-Defamation League) are still at each other's throats, no holds barred."

HIER WAS BORN with the soul of an activist. Since he was child, he dreamed of taking revenge upon the Nazis who wiped out most of his parents' families in Poland. For Hier--as for most Jews--the Holocaust was the searing event of the 20th Century. But later, as a student of history, he saw the Nazis' war on European Jewry as part of a horrific pattern.

"I remember thinking about the Book of Esther, the story of the first genocide--Haman's plot to destroy the Jews. I was always fascinated by the historical validity of that narrative--how it repeats itself in generation after generation," he says. "There was always a plotter out there who wanted to destroy the Jews."

Unlike Holocaust survivors and authors Elie Wiesel and Primo Levi, Hier's tools are not pen and paper but museums, speeches and movies. In 1982, he won an Oscar for "Genocide," a documentary about the Holocaust, narrated by Orson Welles and Elizabeth Taylor, that he co-authored with distinguished British historian Martin Gilbert. (Hier accepted the award wearing his yarmulke.) Hier trades on emotion, not intellect. He realizes that the center's vast majority of members are not steeped in th e culture and traditions of Jewish life. To get people to pay attention to his battle against anti-Semitism, Hier refuses to let anyone forget the Holocaust even for a moment. For Marvin Hier, it is simply "the minimum where otherwise unaffiliated Jews w eigh in."

"It's a sad fact," adds Hier's chief financial backer, Canadian financier Sam Belzberg, "that Israel and Jewish education and all the other familiar buzzwords no longer serve to rally Jews behind the community. The Holocaust, though, works every time."

Hier gives the Holocaust a uniquely California spin. He likens the potential of another such cataclysm to predicting earthquakes. "If you chart the history of earthquakes," he says, "you find that some are more severe than others. You also recognize that they are not freak accidents. No one would conclude that we shouldn't have any research into earthquake prediction, or that we shouldn't prepare ourselves for the possibility that there might be another."

To that end, Hier has dedicated himself to, among other things, Nazi hunting. In 1979, when the center was in its infancy, Hier successfully lobbied West Germany to rescind a proposed statute of limitations on the prosecution of Nazi war criminals. Since then, the center has forced the Canadian government to set up systems for pursuing resident ex-Nazis and other war criminals. And he has urged identical legislation in Great Britain, Australia and New Zealand. He was also instrumental in publicizing and promoting the career of Viennese Nazi-hunter Simon Wiesenthal. "Before meeting up with Hier," says one Wiesenthal Center insider, "Simon was nickel and diming it in Vienna. He couldn't even pay his phone bills."

In the deadly serious business of protecting Jews around the world, Hier is an affable, charming activist. He can seem quite childlike--offering Cokes and candy to important visitors--and, when not battling anti-Semites, he follows his beloved Chicago Cubs on his office TV. He and his wife, Marlene, an urban planner who is director of membership for the center, live in West Los Angeles, in Beverlywood. His oldest son, Ari, 26, was just appointed director of the Hillel Student Union at USC. Avi , 25, is a vice president at Baer, Stearns, a stock-trading house.

And despite his mission, "Moish," as Hier's friends call him, doesn't always take himself too seriously--at a 50th birthday party for Bill Belzberg, Sam Belzberg's brother, the good rabbi jumped out of a cake.

Michael Berenbaum, project director of the U.S. Holocaust Memorial Museum in Washington, believes that the style and message of "Genocide" are completely indicative of Hier. " 'Genocide ' is a substantive piece of work," Berenbaum says. "But watching it is like sitting in a dentist's chair where the drill begins at the first moment and doesn't let up till the end of the two hours. If it had, it might have been more effective. In a real sense, that is Marvin Hier."

Yet Berenbaum has nothing but praise for the man's achievements. "Hier has essentially taken what could have been regarded as a small, parochial, peripheral institution and transformed it into the largest single membership organization in American Jewish life."

For the 380,000 families worldwide who support the center with their contributions, Hier is refreshing. They cheer his abrasive public manner, his fondness for confrontation and hyperbole, his doom-and-gloom pronuncimentos and even his lapses into Holocaust shtick: For example, Hier returned from a visit to the site of the Treblinka death camp in Poland bearing ash-covered stones uncovered in a field. "Moish used to shlep those stones around on satin pillows," a Hier intimate says. "He was perfectly sincere, but it was awfully kitsch."

"He's a ballsy little guy," says producer Dan Curtis, who raves about Hier's creative input into his acclaimed TV miniseries, "War & Remembrance." "He hangs in there; he's tougher than hell, and he won't take bull from anybody."

Simon Wiesenthal is even more effusive. "He's dynamite," says Wiesenthal, in his broken English, from his home in Vienna. "The man is never quiet. He is always trying to do things no one else has ever tried. I know that he makes other Jewish organizations nervous. This center is young and aggressive. I hope this aggressivity will survive me."

By all indications, it will. In fact, the center's newest project, designed by James Gardner (who also designed The Museum of Diaspora in Tel Aviv), is rising now on Pico Boulevard. The Hebrew name of The Museum of Tolerance is Beit Ha'Shoah --the House of the Holocaust. However, its focus will extend, in substance and appeal, beyond the Holocaust and document other genocides, including those of the Cambodians and the Armenians. As planned, the first floor of the museum will trace the histor y of racism and prejudice in the United States and relates the story of the Holocaust. The second floor will have a bank of 33 interactive computer consoles linked to videodiscs containing, among other resources, the center's newly published, four-volume "Encyclopedia of the Holocaust." The third floor will include a 324-seat theater that will regularly show motion pictures relevant to the themes of the museum. The museum will also house one of the country's most complete Holocaust archives, containing 5 00 hours of videotaped interviews with survivors, liberators and others, and 1,200 archival collections of historical documents, correspondence, photographs, diaries and artifacts.

There is no doubt that Hier intends the museum to become a tourist attraction. This is not, he insists, a place just for Jews. "Hatred did not die in the bunker with Hitler," he says. "These are not dinosaurs that you can walk away from at the Museum of Natural History and then forget about. The haters are still among us."

THE SON OF a Polish immigrant lamp polisher who arrived in the United States on the White Star ship in 1917, Hier was not always eager to take on the world's assorted Jew-haters and baiters. Certainly not in New York, where he was raised in the city projects. Young Hier spent his early life within three circumscribed blocks along Cannon Street, his birthplace, among, he recounts, largely "Sabbath-observant look-alikes and think-alikes."

He was studious, not a street fighter. "I'd like to claim that when we were 13 or 14, we fought back. But when the gangs (from other neighborhoods) pounced on us," he says, "we just ran."

Hier did well in school. Soon after he was ordained at the Rabbi Jacob Joseph Theological Seminary, his teachers recommended him to an emissary from the fledgling Jewish community in Vancouver, Canada, who had come to New York looking for someone to take over the city's premier Orthodox synagogue. For the newly married 22-year-old rabbi and his 19-year-old wife, swapping the insular streets of their neighborhood for Canada's lush and laid-back Pacific Coast was like moving to the moon. Bu t Hier was adventuresome, and discouraged at the prospect of achieving prominence in New York's long-established Jewish community. For Hier's Yiddish-speaking father, who had never heard of Canada, the move was incomprehensible.

"My father did not know geography very well," recalls Hier. "When I told him I was going to Vancouver, he thought I told him I was going to 'Van-Cuba.' He said, 'What Jewish boy goes to a communist country?' "

In 1962, some 7,500 Jews lived in Vancouver. In salmon-rich British Columbia, these truly were bagel-and-lox Jews: They drove to shul on the Sabbath, in violation of strict Jewish law; most did not keep kosher homes, and intermarriage was not uncommon. Other Orthodox rabbis would have been dismayed at this lack of piety. Hier saw opportunity. As rabbi of Congregation Schara Tzedek, Hier discovered a facility for inspiring young people. It dawned on him that through the synagogue youth movemen t he could reshape the lives of all his congregants.

Marc Belzberg was one of Hier's first disciples. A child of startling self-assurance, Marc would become scion of a financial empire that grew out of the furniture business that his grandfather, Abraham, had established in Edmonton. He would also become Hier's inside track to Sam Belzberg, Marc's father and the man who would make The Wiesenthal Center financially possible.

When Hier met Marc, Sam and Fran Belzberg were happily non-observant newcomers to Vancouver. Because of Marc's fascination with Hier, however, the curious Belzbergs joined Hier's congregation. But they became angry and perplexed with the boy's sudden and forceful swing toward Orthodoxy.

Fran Belzberg's distress over her son's religiosity grew daily. And soon her other children, under Marc's influence, began to fall into strict religious observance "like dominoes." "Travel was especially tough," she recalls. "We'd go to Maui, and I'd have to bring along 50 pounds of kosher meat."

Despite Fran's demands that Hier stop "brainwashing" the children of the community, the Belzbergs eventually warmed to Hier. In the Canadian business community, the Belzbergs were outsiders with a seldom-appreciated instinct for making profitable corporate acquisitions. Hier, too, was an outsider. The couples became friends.

When Hier began to engage in open political activism, Belzberg was his most fervent supporter. Vancouver Jews were alarmed at Hier's outspokeness, especially at the spectacle Hier provided to Soviet Prime Minister Alexei Kosygin in 1975: When Kosygin arrived at the Vancouver Hotel, Hier, with the city's Reform and Conservative rabbis, all replete in prayer shawls and tefillin , or phylacteries, greeted him with loud prayers for the consolation of their oppressed Jewish brethren in the Soviet Union.

Soon Hier was hobnobbing with royalty, but even then on his own terms. On one occasion there was a noted Jewish Canadian jurist who took issue with Hier over the yarmulke he insisted on wearing at a Victoria reception for Queen Elizabeth and Prince Phillip. To his dismay, the royal couple was captivated by the head covering, engaged Hier and his wife in friendly conversation and ignored the judge.

In 1975 Hier took a year's sabbatical in Israel. There, he encountered the Or Same'ach ("happy light") Yeshiva in Jerusalem. Or Same'ach's scouts used to scour the city for the many young, disheveled Jewish Westerners who flocked to Israel during their travels. They would bring them to the yeshiva where the youths would be bombarded with Sabbath good feeling and haimish ness. Eventually many would enroll as students, and some would become ba'alei tshuva (newly observant Jews).

It occurred to Hier that if the key to spreading Orthodox Jewish observance was young people, then he was wasting his time in Vancouver, where he was preaching to the converted--the same people who flocked to his synagogue week after week. When Hier returned home in September, it struck Sam Belzberg that the fire had disappeared. Belzberg decided the man needed a drink and a sympathetic ear and invited him into his study. "Hier said, 'I don't drink,' " recounts Belzberg. "I said, 'You'll have one anyway.' " He drank. And Belzberg heard his story. Los Angeles, said Hier, was becoming a vibrant center for Jewish life. And that's where he wanted to move.

Hier and Belzberg flew to Los Angeles in early 1977, where they quickly snatched up the old Reiss-Davis Center building on Pico Boulevard; real estate maven Joe Tannenbaum of Toronto had agreed to match Belzberg's half-million-dollar contribution to open a West Coast branch of Or Same'ach.

Word quickly reached the ears of Rabbi Maurice Lamm, then head of the Beth Jacob Congregation of Beverly Hills, the largest Orthodox synagogue in the western United States. He reportedly got his brother Norman Lamm, president of Yeshiva University in New York, to call Hier and offer an affiliation with Yeshiva University. L.A.'s nascent Orthodox community was virtually kvelling that, finally, there would be an Orthodox college for their children. Hier was equally delighted, having unex pectedly upgraded his operation from a yeshiva to a university affiliate called Yeshiva University at Los Angeles (YULA).

HIER DROVE TO LOS Angeles with his wife and two young sons in July, 1977. During the course of the summer, Hier enlisted real estate developers Roland Arnall and Esther Cohen, who became his lay leaders, and Mara Kochba, a native New Yorker who had worked in communal public relations and fund-raising. With Sally Arnall and Marlene, they sat in the courtyard of Hier's rundown building and planned a fund-raising banquet. A cursory glance at the calendar revealed that Nov. 12--the date of the banquet--was the anniversary of Kristallnacht, the Nazi's first pogrom. Upon discovering this, Hier chortled with childlike glee. "We're in business," he declared.

It was during the next month that the idea for a commemorative museum for the Holocaust with a strong activist, Jewish-defense orientation jelled. Then, while planning the banquet Hier proposed honoring Simon Wiesenthal. Hier and his associates realized that if they could convince Wiesenthal to back their efforts, they could have both a school and a center. With characteristic decisiveness, Hier got on the telephone and set up a meeting in Vienna.

Upon arriving a week later, Hier discovered that his luggage had been lost. Unable to shave, he went down to the hotel barbershop. As Hier sat in the barber's chair, he noticed a framed, autographed photograph of Adolph Hitler. He doesn't remember what he said to the barber, but, for Hier, this was clearly an epiphanous moment. Although in the post-Holocaust world it was impolite to be openly anti-Semitic, there were clearly people out there who regretted that the Final Solution had not b een final.

Wiesenthal was flattered. The center would become America's answer to Yad Vashem, Israel's national Holocaust museum in Jerusalem. And Hier assured Wiesenthal, who detested the idea of a museum in which files and photographs would merely gather dust, that it would be run as an activist operation. "If they had said they wanted to set up on the East Coast," Wiesenthal says, "I'd have said no. It is built up already. But the West Coast was, from the Jewish point of view, a spiritual desert. And I felt that something should be done."

Although Weisenthal's support of the center was what Hier wanted, it immediately embroiled the center in controversy. A few years before, a group of Holocaust survivors led by wealthy Jewish financier Abraham Spiegel, chairman of the board of Columbia Savings, had invited Wiesenthal to a dinner aimed at funding a Holocaust memorial in the federation's headquarters. What came out of that event is still debated. There are those within Spiegel's group who contend that they had cut a deal with Wiesenthal, that he had agreed to back their proposed memorial. Hier says that Wiesenthal had never agreed to lend his name to the Martyrs' Memorial Museum, and Wiesenthal concurs. Wiesenthal's withdrawal cost the group some $25,000 (but the memorial was eventually built). Although Hier reimbursed them, he was accused of underhanded dealings.

Rabbi Chaim Seidler-Feller, director of the Hillel Jewish Student Union at UCLA, recalls confronting Hier at the time. "I asked Hier why he was doing this when the Martyrs' Memorial had been in the works for 10 years and was reaching its culmination. His response was: 'We will do it bigger, better, faster--and without the survivors.' There was no regard on his part for communal niceties or respect for the survivor community. It was a venture that he viewed as competitive. Whoever had the biggest center would be king."

What's more, after the euphoria of the first dinner faded, the local Orthodox community became disenchanted as members recognized that Hier's commitment to the college was overshadowed by his commitment to the center. "He had a new toy," says one former center employee, "so Moish put aside the old toy."

Their fears were well-grounded--the school never evolved into a full-scale affiliate of Yeshiva University in New York. Today, YULA is, in essence, a high school. Indeed, when Hier recently made his appeal for a further $5 million in federal funding for his museum, some parents of YULA students threatened to withdraw their children, and there was serious talk of building a new Orthodox Jewish high school. Hier responded to this threat with customary aplomb; in late May, he outbid the city's Sikh and Sephardic Jewish communities for a school building on Robertson Boulevard, into which he plans to move at least the girls school. Heir says it cost the center $2.25 million.

Indeed, Orthodox Jews have never been givers to The Wiesenthal Center. Hier, for his part, has not actively sought their support. "My appeal was always beyond the Orthodox community," he says. At times it has seemed that Hier has gone out of his way to offend his fellow Orthodox. Some academicians were reportedly disturbed when Hier, who possessed no academic credentials beyond his yeshiva ordination, had appointed himself "dean" of Yeshiva University of Los Angeles. And that, despite his lack of academic standing, he would not permit the parent organization in New York to exert any influence on his operation.

Not all Jewish leaders keep their sentiments private. For the past several years, Hyman Haves has been Hier's equal in tenacity and verve. The 74-year-old former ADL executive has publicly battled The Wiesenthal Center over its foray into California and federal politics. Haves believes the center--which was united with the yeshiva and thus a religious institution--has no business seeking money or favors from the government. Haves, in fact, testified before the Legislature against the appr oval of the $5-million grant in 1985.

Like Haves, UCLA's Rabbi Seidler-Feller has not always hidden his criticisms of Hier and The Wiesenthal Center. Seidler-Feller claims that his outspokeness almost cost him his job. At a Yom Kippur service several years ago, Seidler-Feller lectured that the center was an aberration from traditional Orthodoxy. "In Orthodox communities," says Siedler-Feller today, "you are never browbeaten with anti-Semitism. The Holocaust is not a force for promoting Jewishness. The agenda for Orthodoxy aft er the war was not to build memorials and not to cry, but to promote learning and create the positive capabilities for the survival of Judaism."

As a result, he says, an irate member of the center tried to have him fired. Hier says he, himself, would never have done such a thing, and knew nothing of it.

In its fervid pursuit of anti-Semitism, the center also sometimes slips. Last February, Donald Dean Hiner, a part-time history instructor at Indiana University-Purdue University at Indiana, taught that the Holocaust never took place and the Nazis had no plan to exterminate the

Jews. Marcia Goldstone, director of the Jewish Community Relations Council in Indianapolis, worked behind the scenes on the Hiner case with university officials and the ADL. The university agreed to suspend Hiner with pay, indicating that he could be fired later. But a Midwest member of the center--unaware of these moves--called Cooper demanding action. Without telling the local Jewish establishment, Wiesenthal Center Director Gerald Margolis contacted the university and urged Hiner's dismissal.

PHOTO: COLOR, Cover, Marvin Hier

PHOTO: COLOR, Marvin Hier

PHOTOGRAPHER: Jim Mendenhall/Los Angeles Times

PHOTO: Seven-year-old Hier was a promising student at New York's Yeshiva Rabbi Shlomo Kluger.

PHOTO: Hier and his Vancouver followers protest the United Nations resolution equating Zionism with racism, 1975.

PHOTO: In a well-publicized disapproval of President Reagan's visit to Bitburg Cemetery in 1985, Hier marches through the town arm in arm with Rabbi Abraham Cooper.

PHOTOGRAPHER: Photographs courtesy The Simon Wiesenthal Center Photographs courtesy The Simon Wiesenthal Center

PHOTO: Accepting his 1982 Oscar for "Genocide" with producer Arnold Schwartzman.

PHOTO: Israeli Prime Minister Shamir and President Bush schmooze it up with the rabbi at a 1989 White House dinner.

PHOTO: On a 1983 mission of rememberance and renewal, Hier addresses Pope John Paul II on behalf of The Wiesenthal Center.

At 4:14 AM, Anonymous Anonymous said...

Your first source is from Lyndon LaRouche, the noted antisemite and crackpot.


At 6:18 AM, Blogger jewishwhistleblower said...

>Your first source is from Lyndon LaRouche, the noted
>antisemite and crackpot.

Thanks, I missed that. But much of the information seems to come from the other sources I noted and the LA Times aticle anyway.


I included the press release as they made much ado about his Republican connections while ignoring his similar Democratic connections.

>former governor of California Gray Davis actually officiated
>at Arnall's wedding in 2000.

At 8:14 AM, Blogger jewishwhistleblower said...,0,7844867.story?coll=la-home-business

February 4, 2005

Workers Say Lender Ran 'Boiler Rooms'
Critics say Ameriquest, touted as an industry model, fabricated data, forged documents and hid fees. The company denies wrongdoing.
By Mike Hudson and E. Scott Reckard, Special to The Times

Mark Bomchill says he'd like to forget the year he spent hustling mortgages for Ameriquest Capital Corp. in suburban Minneapolis.

Slugging down Red Bull caffeine drinks, sales agents would work the phones hour after hour, he said, trying to turn cold calls into lucrative "sub-prime" mortgages — high-cost loans made to people with spotty credit.

The demands were relentless: One manager prowled the aisles between desks like "a little Hitler," Bomchill said, hounding agents to make more calls and push more loans, bragging that he hired and fired people so fast that one worker would be cleaning out his desk as his replacement came through the door.

"It was like a boiler room," said Bomchill, 37. "You produce, you make a lot of money. Or you move on. There's no real compassion or understanding of the position they're putting their customers in."

Indeed, Bomchill — who said he left Ameriquest because he didn't like the way the company treated its employees and customers, and now works as a mortgage broker — contends that the drive to close deals and grab six-figure salaries led many Ameriquest employees astray: They forged documents, hyped customers' creditworthiness and "juiced" mortgages with hidden rates and fees.

Such claims are not unusual against sub-prime lenders, which are a frequent target of consumer groups.

Ameriquest, however, has been held up as an industry model since agreeing in 2000 to establish a fund for needy borrowers and to adhere to a list of "best practices." The company says it holds itself "to the highest standards" and does not tolerate unethical or improper behavior by its employees.

The nation's largest sub-prime mortgage lender, based in Orange, has sought to burnish its image as it moves into prime, or mainstream, mortgage lending. It has increased its political profile, donating heavily to various campaigns, including in Sacramento. The privately held company, which may be considering a public stock offering, committed $75 million to have the Texas Rangers ballpark dubbed Ameriquest Field. And on Sunday it should gain even more recognition when it sponsors the halftime extravaganza at Super Bowl XXXIX.

"At Ameriquest," the company likes to say, "we never forget that our customers deserve respect, fairness and honesty."

Yet a far different picture emerges from public records, interviews and dozens of consumer lawsuits:

• Ameriquest customers filed more complaints with the Federal Trade Commission from 2000 through 2004 than did those of two of its biggest competitors combined, the agency said — 466 compared with 101 for Full Spectrum Lending (Calabasas-based Countrywide Financial Corp.'s sub-prime unit) and 51 for Irvine-based New Century Financial Corp.

• From 2000 through 2004, 134 complaints (including allegations of fraud and unfair business practices) were registered against Ameriquest with the California Department of Corporations, compared with 39 for New Century and 21 for Full Spectrum.

• Recent lawsuits filed by consumers in California and at least 20 other states allege a pattern of fraud, falsification of documents, bait-and-switch sales tactics and other violations. Six of these suits seek class-action status to represent large groups of borrowers; such status has been granted for a 2001 suit filed in Redwood City, Calif. In a sworn declaration in that case, a former loan officer named Kenneth Kendall said Ameriquest managers encouraged employees to "promise certain interest rates and fees, only to change those rates at the time of the closing."

Ameriquest says it doesn't comment on pending litigation. But it notes that since 2003, it has had in place automated systems that allow loan officers to lower rates but not to raise them.

• In court documents and interviews, 32 former employees across the country say they witnessed or participated in improper practices, mostly in 2003 and 2004. This behavior was said to have included deceiving borrowers about the terms of their loans, forging documents, falsifying appraisals and fabricating borrowers' income to qualify them for loans they couldn't afford.

Five of these former employees made their claims as part of employment discrimination lawsuits that they filed against Ameriquest. Three other ex-employees gave sworn statements in connection with other lawsuits against the company. Among the other ex-employees, most were referred to the Los Angeles Times by people who had worked in the offices where alleged improprieties occurred. The newspaper sought them out so as not to rely solely on information provided by those in litigation with the company.

• Two ex-workers at an Ameriquest office in Sacramento that focuses on retaining existing customers said people often were solicited to refinance loans that they had for less than two years. In adopting a best-practices standard in 2000, Ameriquest pledged not to resolicit its customers for two years to discourage "flipping," or pushing new loans simply to generate fees and commissions.

Nearly one in nine mortgages made by Ameriquest last year was a refinance of an existing company loan less than 24 months old, according to an analysis of public records by DataQuick Information Systems done at the request of The Times. That was a higher rate than for any of six competitors included in the analysis.

Ameriquest says that it doesn't solicit refinancings from its customers within two years, but that many of its borrowers contact the company on their own seeking a new loan.

• On Jan. 10, the Connecticut Department of Banking said it would seek to bar Ameriquest from doing business in the state for allegedly charging excessive fees and repeatedly violating a state law aimed at preventing loan flipping. Ameriquest is challenging the action.

Consumer activists say the company, a big-time donor to both Democrats and Republicans and the No. 1 contributor to the 2005 Presidential Inaugural Committee, has also been lobbying against state legislation aimed at countering alleged abuses by sub-prime lenders.

"They try to paint themselves as the good guys — that they've adopted best practices and they're kind of the gold standard for the industry," said Norma Garcia, a California lobbyist for Consumers Union. "But really, when you look at what they're doing to try to fight predatory- lending legislation, it shows exactly where they're coming from."

For its part, Ameriquest has maintained that so-called anti-predatory lending laws hurt the poor by making it harder for them to get credit.

Courting Politicians

Ameriquest executives declined requests for interviews, asking instead for a written list of questions. The company answered some of those questions in writing and also offered a general statement about its practices.

"In its 25-year history, Ameriquest has helped hundreds of thousands of homeowners purchase or refinance their homes, making it possible for them to achieve their financial goals and enhance their quality of life," the statement said. "We are proud of our role in helping increase homeownership to historic levels. We are a nationwide lender and our goal is to be an industry leader.

"Ameriquest pioneered innovative best practices in the mortgage industry," the statement continued. "We have procedures and internal controls in place that are designed to ensure that underwriting standards, pricing policies and property valuations are fair and accurate. We act promptly to resolve any issues that arise."

The company is headed by Chairman Roland E. Arnall, a developer and financier who in 1977 helped found the Simon Wiesenthal Center, a Jewish human rights organization, and served for 16 years on the California State University board of trustees.

Arnall, 65, a media-shy billionaire, has made headlines in recent years by buying a 10-acre Los Angeles estate for $30 million from singer Engelbert Humperdinck and a ranch in Aspen, Colo., for $46 million from movie mogul Peter Guber. Attendees at Arnall's holiday party late last year included Gov. Arnold Schwarzenegger and his wife, Maria Shriver, along with the couple they replaced in Sacramento, Gray and Sharon Davis. Also mingling at the soiree were other politicians from both sides of the aisle, including Atty. Gen. Bill Lockyer, a Democrat.

Ameriquest is among the largest political donors in California, spending $3.8 million in the 2003-04 election cycle on state candidates and ballot measures. Schwarzenegger was the largest benefactor, picking up $1.18 million of the company's money for his various campaign bank accounts, among them his reelection committee and one he uses to promote ballot measures.

In response to the barrage of lawsuits, the company has pointed to signed documents from customers saying they understood the terms of their loans. In a Florida lawsuit seeking class-action status, for example, Ameriquest asserts that the plaintiffs "distorted the actual facts concerning the underlying transactions." The allegation that borrowers didn't receive proper disclosures, Ameriquest says, is "directly belied by the fact that each plaintiff acknowledged in writing that they had received such disclosures."

But the plaintiffs in those cases contend that loan salespeople used fast talk and sleight-of-hand paper shuffling to get them to sign documents without knowing the consequences.

An East Palo Alto resident, Sara Landa, said Ameriquest employees tricked her into signing a mortgage that required her to pay $2,494 a month, more than she earns cleaning houses. All the negotiations were in Spanish, according to Landa's lawsuit, but all the loan documents were in English — a language in which she's not proficient.

"The only thing she ever got from Ameriquest that was in Spanish was a foreclosure notice," said her lawyer, Nathaniel McKitterick.

Landa and Ameriquest reached a confidential settlement in December. Ameriquest did not admit wrongdoing. In its response to The Times, the company said it went to "great lengths to ensure customers are fully informed about loan terms so there are no surprises at the closing table."

Allegations of falsified documents are a common thread in the borrower lawsuits and in more than two dozen accounts from ex-workers.

In a suit filed Jan. 14 in U.S. District Court in San Francisco, Nona Knox claims that Ameriquest qualified her and her late husband, Albert, for a loan by fabricating documents showing that he earned $6,800 a month as proprietor of Knox Music Academy. At the time of the loan, the suit says, Albert Knox was 79 and suffering from terminal cancer. The music school never existed, the suit says.

"Mr. Knox had never played a musical instrument," said Aaron Myers, an attorney for Nona Knox, whose complaint against Ameriquest centers on other issues, including allegedly excessive closing costs. "This was truly made up out of whole cloth without their knowledge or consent, or any suggestion from them."

The company has not yet formally responded to Knox's lawsuit, which seeks class-action status. Before the suit, Ameriquest wrote to her attorneys denying anything was amiss with the loan.

Closing the Loan

Fifteen hundred miles away in suburban Kansas City, Kan., ex-employees describe a similar ploy: Ameriquest staffers allegedly fabricating borrowers' income and falsifying appraisals to make loans go through.

"Whatever you had to do to close a loan, that's what was done," said Brien Hanley, a former loan agent at the company's Leawood, Kan., branch. "If you had to state somebody's income at $8,000 a month and they were a day-care provider, who's to say it wasn't?"

Hanley said he quit because he was fed up with conditions at the company. He now works as a mortgage broker elsewhere.

Lisa Taylor, a former loan agent at Ameriquest's customer-retention office in Sacramento, said she witnessed documents being altered when she walked in on co-workers using a brightly lighted Coke machine as a tracing board, copying borrowers' signatures on an unsigned piece of paper.

Taylor contends in a lawsuit filed in Sacramento County Superior Court that she was fired for complaining about sexual harassment and widespread falsification of documents. Ameriquest has not filed a response to Taylor's allegations. Both sides have agreed to have an arbitrator decide the case.

Meanwhile, appraisers in six states said in interviews that Ameriquest had tried to bulldoze them into inflating home values and, in some cases, lying about property defects.

"Ameriquest is the king of this kind of thing," said Greg Boyd, an appraiser in Hopland, Calif. "The loan officers are … aggressive, pushy, they talk fast. They know how to put the pressure on."

Ameriquest says it has "tight controls and policies to help ensure accurate property valuations."

Several former loan officers said employees frequently abused the company's "stated income" loan program, which requires only a letter from the borrower declaring how much he or she makes. Borrowers were told what their income had to be to qualify, these ex-workers said, and they were often coached to invent fictitious side jobs, such as home-based computer consulting, to hit the mark.

Nearly one out of every six Ameriquest mortgages sold to Wall Street investors in 2004 was a stated-income loan, according to a Times analysis of 90,000 Ameriquest mortgages listed in filings with the Securities and Exchange Commission.

Many of the ex-employees likened Ameriquest's culture to the rough-and-tumble world of "Boiler Room," a 2000 movie about fast-talking, young stock swindlers who revel in their powers of anything-goes salesmanship.

The comparison is more than happenstance: "That was your homework — to watch 'Boiler Room,' " Taylor said. Managers and employees passed around the film to keep themselves fired up, she and others explained. Kendall, in a sworn declaration in the Redwood City class-action case, said that watching "Boiler Room" was part of his Ameriquest training.

It was all about "the energy, the impact, the driving, the hustling," Taylor said.

Bomchill, who worked as a loan officer in the Minneapolis suburb of Plymouth in 2002 and 2003, said Ameriquest managers often discouraged questionable practices — but with a wink: "It was kind of … see no evil, hear no evil."

Three other former workers at the branch said Bomchill's description was accurate.

"I really don't think they have the customers' best interest in mind at all," said Troy Huston, a former colleague of Bomchill's who now works as a broker for Access Home Finance in Bloomington, Minn.

"They really are all about making the dollar and dealing with the consequences later."

Not everyone, though, shares that view. One former employee at the Plymouth branch disputed Bomchill's account of widespread misdeeds. The employee, who asked not to be named, said he believed some appraisals might have been inflated. But overall, he said, "we had a respect for the rules and wanted to do things honestly."

Several of the former employees who were interviewed also stressed that no one at Ameriquest encouraged them to violate laws.

"I truly do believe that nothing illegal was done," said Brock Fegan, a loan officer at Ameriquest's Grand Rapids, Mich., branch in 2004.

Still, Fegan said he was concerned about how Ameriquest targeted "poorly informed customers" and stocked its branches with ill-trained loan officers who "a lot of times don't know what they are doing." As a result, he said, many customers — including some with excellent credit histories — end up slammed with high rates and excessive fees.

Ameriquest says its training system "equips our associates with the tools and information they need" to do their jobs properly.

Denouncing Tactics

The allegations against Ameriquest are the latest for the sub-prime industry, which charges higher fees and interest rates to customers who may have missed mortgage payments, run up huge credit card debts or struggled with job losses and bankruptcies.

Many such clients are financially unsophisticated, increasing the chance of their being exploited.

"There is a huge imbalance of power and knowledge between the people making these loans and the borrowers," said Benjamin G. Diehl, a specialist in lending abuse with the California attorney general's office.

Sub-prime lenders made $587 billion in new mortgages last year, up from $390 billion in 2003, according to National Mortgage News. During the first nine months of 2004, Ameriquest's slice of that was about $37 billion, including $16 billion in the third quarter, the trade publication estimated. (The company stopped releasing its lending figures in late 2003.) At that pace, Ameriquest's total for the year was set to exceed $50 billion.

Ameriquest traces its roots to Long Beach Savings & Loan, a thrift headed by Arnall during the 1980s. The bank moved to Orange in 1991 and was converted to a pure mortgage lender in 1994.

In 1996, the company, renamed Long Beach Mortgage Co., paid $4 million to settle a Justice Department lawsuit accusing it of gouging older, female and minority borrowers. Prosecutors accused it of allowing mortgage brokers and its employees to add a fee to these customers of as much as 12% of the loan amount.

The company later reorganized as Ameriquest Capital. Its Ameriquest Mortgage Co. unit makes direct loans to customers, and its Argent Mortgage Co. works with independent brokers.

In the late 1990s, the company's sub-prime lending drew the attention of a national housing advocacy group, Assn. of Community Organizations for Reform Now, or ACORN. The group's president, Maude Hurd, denounced the company as a collection of "slimy mortgage predators." About the same time, the Federal Trade Commission began an investigation into its lending practices.

In July 2000 Ameriquest worked out a cease-fire with ACORN.

The deal included a commitment to make $360 million in low-interest, low-fee loans to customers in the largely minority neighborhoods where ACORN operates. (Ultimately, according to ACORN, Ameriquest made only a small fraction of those loans because the group found other firms offering better terms for community residents. Ameriquest says it continues to work with ACORN on the program.)

Soon after, the FTC called off its investigation. Fair lending advocates, including the National Community Reinvestment Coalition and the Leadership Conference on Civil Rights, hailed Ameriquest as a progressive force in the sub-prime market.

With its regulatory and image problems behind it, Ameriquest embarked on an all-out marketing offensive that now includes an Internet advertising blitz and two blimps that hover over major sporting events.

According to the ex-loan officers interviewed by The Times, however, the company's growth has been generated more by hard-sell tactics than by slick marketing. They described 10- and 12-hour days punctuated by "power hours" — nonstop cold-calling sessions to lists of prospects burdened with credit card bills; the goal was to persuade these people to roll their debts into new mortgages on their homes.

Employees who put up big numbers, they said, were rewarded with trips to Hawaii and the Super Bowl and, in some cases, with $100,000-plus salaries. No matter how many loans they peddled, however, the pressure rarely eased, ex-employees said.

"I don't think there's a day that went by that I wasn't told I was going to be fired," recalled Omar Ross, who said he was a top producer when he worked for Ameriquest in Grand Rapids in 2003 and 2004, quitting the company that year. "I was told I was going to be fired at least 200 times."

Supervisors didn't let up even when he was meeting his quota, Ross said. "They would tell everybody: 'Omar did 10. How come everybody else can't do 10?' Then in private they would turn around and say: 'Why can't you do more? You're slacking. You're capable of doing more.' "

In such a rabid atmosphere, several ex-employees said, abuses become inevitable.

"You close fast because the longer somebody has to sit and think about it, the longer they have to think about the numbers," said Dave Johnson, a former branch manager in suburban Detroit. "You don't want somebody to get buyer's remorse before they close."

Hudson is a journalist based in Roanoke, Va., and Reckard is a Times staff writer. Times research librarian John L. Jackson, news assistants Chris Tinkham and Todd Leibensperger and staff writer Dan Morain contributed to this report.


Ameriquest Capital Corp.

Founded: 1979 as Long Beach Savings & Loan

Headquarters: Orange

Branch offices: 298 in 38 states

Employees: More than 12,000

Subsidiaries: Ameriquest Mortgage Co., Argent Mortgage Co., Ameriquest Mortgage Securities, Long Beach Acceptance Corp., Town & Country Credit


Sources: Ameriquest Capital Corp., Hoover's

Los Angeles Times


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