Competitive Intelligence

Ameriquest - Super Bowl Sponsor's Boiler Room Operation

Ameriquest Mortgage, Super Bowl Halftime Show sponsor, has been accused in a sweeping LA Times story of running a boiler-room operation and pressuring business associates into wrongdoing in pursuit of sales.

Appraisers in six states said in interviews that Ameriquest tried to hustle them into inflating home values and even lying about property defects. Now, my father-in-law is a property appraiser and I can tell you, he'd have filed a complaint over that sort of thing. He's cut ties with other lenders for a LOT less questionable ethics than that.

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."

Maybe it's no coincidence that former employees swear that, to fire up and energize them, watching the movie "Boiler Room" was part of their Ameriquest training...?

- Arik