Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : More sub prime lenders are targeted

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February 01, 2006

More sub prime lenders are targeted

Sub prime lending abuse has reached rather high numbers, and with Ameriquest Mortgage agreeing last week to pay $325 million to settle, and obliging to reform its operations, more sub prime banks and lenders are under scrutiny.

Sub prime lenders have made tons of money, quite literally, by lending to the people with credit problems. Since these folks had nowhere else to turn and badly wanted their own piece of American Dream, lenders like Ameriquest, Household International, Argent Mortgage, Long Beach Mortgage, BNC Mortgage and others, felt free to oblige. The result was sky high fees and interest rates on the mortgages that in turn were quickly resold to private and institutional investors for a hefty premium.

So right now, several State financial regulators teamed up on other cases involving sub-prime lenders, according to consumer services for Washington state's Department of Financial Institutions.

In 2002, Household, now owned by HSBC Finance Corp., paid a record $484 million to settle an investigation that involved almost every state.

With that said, sub prime lenders have filled a large void and offer many useful products, enabling many more people to become homeowners. Just navigate the sub prime waters very carefully.

More on Ameriquest, Ameriquest fees, sub prime fraud lending in Britain.

 
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