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Fenwick & West Files Pro Bono Class Action Alleging Predatory Lending Against Women and Communities of Color

February 1, 2005 (Mountain View and East Palo Alto, CA) – On January 14, 2005, on behalf of named Plaintiffs residing in San Mateo and Alameda Counties, Fenwick & West LLP and Community Legal Services in East Palo Alto filed a class action Complaint alleging predatory lending practices by Ameriquest Mortgage Company and Argent Mortgage Company, both wholly-owned subsidiaries of Ameriquest Capital Corporation. The suit alleges that during loan transactions, the Defendants (1) engage in a pattern of discriminatory conduct—targeting borrowers on the basis of race, national origin, age and gender—and provide those borrowers less favorable terms and conditions in loan contracts than would be provided but for the borrowers’ race, national origin, age and/or gender; (2) fail to provide required disclosures, including the statutorily mandated Notice of Right to Cancel, and, without the applicants’ knowledge or consent, falsify income stated on loan applications so that borrowers qualify for larger loans than they ask for and can afford; (3) engage in a “bait and switch” scheme, representing to borrowers that their loans will have certain terms and conditions, then induce borrowers to sign mortgage contracts consisting of significantly less favorable terms and conditions, while at the same time misleading the borrowers about those terms and conditions; and (4) wrongfully induce borrowers to take residential mortgages that saddle borrowers with principal amounts Defendants know or should know the borrowers’ income cannot support, and then charge the borrowers undisclosed, unjustifiably high origination fees and expenses.

For more information regarding the class action, please contact Aaron Myers of Fenwick & West, LLP, at 650. 335.7640 or amyers@fenwick.com.