Ameriquest Mortgage Base Case
Headquarters: 1100 Town and Country Rd., Orange, CA 92868
Phone: (714) 541-9960
Business: One of the nation's largest providers of sub-prime mortgagesloans for borrowers with less than perfect credit.
Chief Information Officer: Mark Sarago
Financials in 2004: The privately held company originated an estimated $24 billion in sub-prime loans and reported an estimated $2.1 billion in sales.
Challenge: Implement a sales management and pricing software system to rapidly process and fund new and refinanced home loans.
- Increase total loan volume by at least 12%, from $24 billion in 2004 to $27 billion in 2005.
- Contribute to parent company Ameriquest Capital's push to increase loan volumes by 20%, from $83 billion in 2004 to more than $100 billion in 2005.
- Increase head count by 36%, from 14,000 in 2004 to 19,000 in 2005.
- Implement a single software system that determines a consistent, benchmark price for all borrowers' fees and interest rates.
Ameriquest Home Loans: Cracking Under Pressure: Even in a fertile market, it's possible to set your sales goals too high.
Loan Rangers: Ameriquest became unusually successful digging up loan candidates others may have overlooked.
Settling Up: Ameriquest's hard-sell tactics worked but, say investigators, violated a series of consumer-protection laws.
Riding the Sub-Prime Wave: As the house market heated up, borrowers stretched themselves to foreclosure-threatening lengths; and lenders helped them.
No-Touch Funding: Believing in your applicants can go too far, and get you both in trouble.
Who's to Say: Automation was supposed to make loan approvals faster, easier and more accurate; did the system fail, or did the officers handling the loans?
Tighter Controls: Making requirements stiffer only works if enforcement gets tighter as well.
Penalties for Abuse: Ameriquest denies wrongdoing, relies on IT for process improvements, and may face penalties in the hundreds of millions from class-action suits.
Avoiding the New Restrictions: It's one thing to let borrowers overextend themselves; it's something else to deceive them into doing it.