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| An Oklahoma borrower, who claims Ameriquest Mortgage Co. ruined her credit because it didn’t pay off mortgages in refinance transactions, has won the largest individual verdict ever obtained against the massive subprime company.Melba Gillean sued the company, claiming that it was negligent in the refinancing of several homes that she owned.
Gillean said the mega-mortgage financer did not pay off her old loans or fund the new loans and accused it of ruining her credit by falsely reporting her as delinquent on the loans. Gillean said she continued to pay on the original mortgages in spite of the delays. David Humphreys, Gillean’s attorney, said the company took her to closing three times. He said Gillean had a contract with the company obligating them to make the loans but that they “strung her out for 120 days” after promising settlement within seven to 10 days. He said that even at trial, the company did not offer an explanation for the delays. Ameriquest has denied that it did anything wrong. “We strongly believe the facts in this case overwhelmingly support our position and we will pursue all of our legal options including appeals,” said Chris Orlando, an Ameriquest spokesman. He declined to answer any other questions. The company is expected to go back to court any day now to fight the verdict. Humphreys said the company also placed disparaging marks on Gillean’s credit report, but at trial, blamed the credit bureau for the derogatory information. He said he proved that Ameriquest provided the credit bureau with the negative information. Humphreys said a company representative testified the file was too incomplete to offer an explanation. The Tulsa County District Court jury awarded Gillean $1.94 million in actual damages and $3 million in punitive damages. The twelve-person jury’s decision was unanimous on actual damages and 11-1 on punitive damages. Punitive damages are awarded when a jury is persuaded that malicious or willful misconduct has occurred. Matthew Lee, executive director of New York-based Fair Finance Watch, a nonprofit consumer advocacy agency, said it was interesting that a jury found that the company had intentionally committed misdeeds. Humphreys also said the case is regarded as such an egregious example of predatory lending that Gillean testified before federal regulators about her experience. “They’re so arrogant. They will never admit that they made a mistake,” Humphreys said. But the nationwide company isn’t expected to let the verdict stand. Humphreys said Ameriquest’s lawyers said at trial that they will pursue overturning the verdict. The state court’s decision comes in the wake of an investigation by attorneys general in 33 states accusing the California-based company of predatory lending. Published reports indicate that the company could make a settlement of $325 million. The subprime behemoth also settled a class action six months ago with four states that accused the company of charging excessive fees. Ameriquest settled those accusations as much as $50 million dollars. “Ameriquest needs to clean itself up,” Lee said. |
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Lisa D. Burden is a legal analyst for MortgageDaily.com and holds a law degree from the University of Maryland. She is currently a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record. e-mail Lisa at: burdenlisa@yahoo.com |
