Washington, DC - Attorney General J. Robert Spagnoletti and Acting Commissioner Thomas E. Hampton of the Department of Insurance, Securities and Banking (DISB) announced today that Ameriquest Mortgage Company, the nation's largest sub-prime mortgage lender, has agreed to pay $295 million in consumer restitution, and make sweeping reforms of its business practices to resolve allegations of deceptive lending practices. The settlement agreement also requires Ameriquest to pay a total of $30 million to the District and 49 settling states.

The $325 million settlement is the second-largest state or federal consumer protection settlement in history. A $484 million multi-state and District consumer protection agreement was reached with lender Household Finance Corporation in 2002.

The District and the states alleged that Ameriquest employees commonly misled consumers in an effort to persuade them to refinance mortgages at rates they could not afford. "The company rewarded employees who met high monthly sales quotas, even when many sales resulted from misleading consumers," said General Spagnoletti. "This settlement seeks to protect the financially vulnerable consumers who buy and refinance their homes in the sub-prime lending market."

Ameriquest has denied the District and states' allegations, while agreeing to pay restitution and make changes to its business practices.