Many homeowners still trapped in Ameriquest loans

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Foreclosure possible even for those with fraudulent mortgage terms

In the fall of 2005, well before the mortgage meltdown hit, Roland Arnall was trying to become an ambassador.

President George W. Bush had nominated the founder of California-based Ameriquest Mortgage to head the U.S. Embassy in the Netherlands. But some in the U.S. Senate questioned whether Arnall was the right choice.

With the pressure on, Arnall's company agreed early in 2006 to a $325 million settlement with the states. Within a few weeks, the Senate blessed Arnall's nomination, clearing the way for the self-made billionaire to pack his bags for the Netherlands.

The settlement was hailed as a significant victory for consumers. But as it turns out, it did very little to ease the huge financial hit experienced by thousands of Americans still trapped in Ameriquest loans.

The settlement offered Ameriquest homeowners a token payment.

For homeowners stuck with fraudulent Ameriquest mortgages, the government's settlement offered no revision of the terms of the loans.

Consumer advocates say that Ameriquest customers at risk of foreclosure have great difficulty winning modifications to their mortgages now, even though the Bush administration has encouraged lenders to make reasonable changes to keep families in their homes.

AJC