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Inner City Press
Report - January 30, 2006
Argent Mortgage Layoffs, One Week
After Ameriquest's $325 Predatory Lending Settlement
One week after announcing a $325 million
predatory lending settlement by three of its subsidiaries, ACC Capital
Holdings on January 30 has reportedly laid off 16% of the workforce of
its non-covered subsidiary, Argent Mortgage. So, analysts wonder, will
Ameriquest’s settlement be paid by eliminating what few levels of
oversight exist in Argent Mortgage’s subprime lending process? The
layoff reports have reached Inner City Press from impacted employees,
one of whom writes:
Subject: Argent Layoffs
Sent: Mon, 30 Jan 2006
16:39:48 -0800 (EST)
From: [Name withheld]
To: Ameriquest-Watch
[at] innercitypress.org
Argent has laid off 16%
of their workforce, approximately 1250-1500 [Editor's note: see
2/1/06 update, below] in job cuts that took place
this past Friday and Today. The positions include mostly production
jobs, but cuts were also made within their corporate staff. No sales
positions were eliminated. One of the biggest changes to come from this
consolidation has been the elimination of set-up and doc draw employees.
Underwriters will perform the set-up function, and funders will assume
the duties of the doc-drawers. Customer service levels and turn time may
be affected by these changes.
Layoffs by Location:
200 Doc-drawers and
set-up workers in White Plains, NY
~100 Doc-drawers and
set-up workers in Schaumburg, IL
Also
Subject: Argent Update
1/30/06
Sent: Tue, 31 Jan 2006
00:26:48 +0000
From: [Name withheld]
To: Ameriquest-Watch
[at] iinnercitypress.org
I thought you would be
interested to know that Argent Mortgage laid off approximately 16% of
its workforce today. Luckily, I still have a job, but I would like to
see what you write about it. I find your site very informative.
Beyond the kind words, one of the questions
raises by the specific job-functions that have reportedly been targeted
for the layoffs is whether, just after three subsidiaries have settled
predatory lending charges, the non-covered subsidiary should be
eliminating what oversight it has of its lending process. What will the
attorneys general (or the U.S. Senators considering the nomination of
ACC founder Roland Arnall to become U.S. ambassador to the Netherlands)
or most importantly the consumers impacted by ACC and Argent have to say
about these strangely-timed layoffs? Only time will tell…
In other media, North Carolina’s attorney
general’s spokeswoman has tried to explain the loopholes in the
settlement by telling the
Charlotte Observer that the settlement was necessarily "limited to
activities over which Ameriquest had direct control." We note that by
laying-off 1200 employees at Argent, ACC can claim to have even less
control over Argent’s high-cost subprime mortgages. The
St. Louis Post-Dispatch has reported on a sample instance of a
borrower whom ACC instructed “to file another application - and this
time include a letter stating that she owns a cleaning company. ‘They
told me what to write,’ she recalls. She says Ameriquest loan officers
instructed her to write that she had received an advance of $12,000 to
clean two office buildings. It wasn't true, but Hopkins says she and her
husband needed the $125,000 loan... They eventually lost the house.”
In other St. Louis news, Fair Finance Watch has
filed comment on the proposed acquisition there of Forbes First National
Corporation’s Pioneer Bank & Trust Company by notorious subprime lender
National City Corporation – click
here to view,
and click here for
FFW Jan. 30 comments on Whitney National Bank’s attempt to buy 1st
National Bank & Trust in Florida.
[Editor's update 1: late on the afternoon of Jan.
31, ACC's spokesman confirmed by email the Argent layoffs, reported 24
hours earlier by Inner City Press. He wrote that "this consolidation
increases our efficiency."]
[Editor's update 2:
on February 1, ACC emphasized to Inner City Press that while the 15%
layoff figure is correct, the individual who first wrote in to us with
the employee number over 1,000 was wrong, that the number is 600. Duly
noted -- along with ACC's argument that that Argent does not, even
cannot, control the mortgages it makes, much less now with 600 fewer
employees.]
Predatory Lending
Settlement Leaves Out Ameriquest’s Largest Lender, Argent, Critics Say
Jan. 23 – Earlier today,
the largest subprime mortgage lending conglomerate in the United States,
ACC Capital Holdings Corporation, announced a $325 million predatory
lending settlement with the attorneys general of more than 40 states.
Almost immediately, questions were raised as to why the settlement does
not cover ACC’s subsidiary which made the most high-cost loans in 2004,
Argent Mortgage.
The
settlement comes at a convenient time for ACC and its founder, Roland
Arnall. In two weeks, the company plans a major multi-million dollar
advertising campaign connected to the National Football League’s Super
Bowl XV in Detroit. Arnall has been nominated to become the United
States ambassador to the Netherlands. He has seen his confirmation
stalled for months due to the pending settlement. But given the
perceived loopholes in the settlement, critics question whether Arnall’s
nomination should be forward in the U.S. Senate.
In 2004, the
most recent year for which Home Mortgage Disclosure Act data is
available, ACC’s Ameriquest Mortgage made 185,833 loans, while its
Argent Mortgage unit made 215,403 loans, more than half of them over the
federal regulators’ high cost definition, of three percent over
comparable Treasury securities on a first lien, and over five percent on
a subordinate lien.
Studies of the
data have shown that ACC and Argent direct a much higher percent of
their high cost loans to African Americans and Latinos than is true of
other, prime-priced lenders.
Inner City
Press in mid-2005 submitted Freedom of Information Act requests to many
states’ attorneys general, for copies of consumer complaints against ACC
and Argent. ACC’s legal department opposed the release of any
information, resulting in ongoing litigation, including in Texas.
ACC and its
predecessors have previously purported to reform their practices, as far
back as 1996 with the Department of Justice and Office of Thrift
Supervision (when the company was named Long Beach Mortgage), in 2000
with the Federal Trade Commission, and since. Among those questioning
the settlement are class action lawyers, by means of a press release.
Consumer protection advocates, however, emphasize the need for binding
reforms at ACC including Argent, and not only monetary settlement for
past loans. This is a developing story.
The
settlement has also given rise to
questions about the due diligence performed by the investment banks
which have helped package Ameriquest’s loans and sell them as
mortgage-backed securities, including the three largest banks in the
United States: Citigroup, JP Morgan Chase and Bank of America. Each of
these three banks has securitized Ameriquest loans, while claiming to
screen out predatory loans. With today’s settlements, questions are
being raised about these banks previous defenses of their practices.
Other recent Inner City Press
reports
Who Pays for the
Global Bird Flu Fight? Not the Corporations, So Far - UN
Royal Bank of
Scotland Has Repeatedly Been Linked to Terrorist Finance and Money
Laundering, Not Only in the Current Brooklyn Case
From Appalachia
to Wall Street: Behind the Mining Tragedy, UBS and Lehman Brothers
Iraqis Absent
from Oil Oversight Meeting on Development Fund for Iraq, Purportedly Due
to Visa Problems
Watching the
Detectives: Oversight of the Development Fund for Iraq Will be Discussed
at the UN on December 28, 2005
From the UN
Budget, Transit Strike, to the USA Patriot Act, 2005 Ends with
Extensions
Some previous
highlights and special reports:
Citigroup
Dissembles at United Nations Environmental Conference
The United
Nations' Year of Microcredit: Questions & No Answers
Other Inner City Press
reports are archived on
www.InnerCityPress.org - if you have
trouble finding previous articles, please
contact us
©opyright 2006 Inner City Press, Inc. To request
reprint or other permission, e-contact Editors [at] innercitypress.com - phone: (718) 716-3540 |
