State AGs: Broker 'Up Selling' a Concern

Iowa Attorney General Tom Miller, who headed the Ameriquest Mortgage investigation, is vowing that the states might next tackle the origination practices of loan brokers.Speaking Jan. 23 during the Ameriquest settlement news conference, Mr. Miller said broker practices "are something we will look at in the future." (Subprime giant Ameriquest Mortgage has agreed to pay $325 million to settle claims with 49 states that the company engaged in abusive lending practices.) During the news conference, the participating AGs singled out the practice of "up selling" to consumers -- whereby the retail loan officer receives extra compensation for originating mortgages that carry either a higher note rate or extra points. Ameriquest's wholesale arm, Argent, was not a party to the settlement. (For more details, see the February issue of Origination News.)