Subprime fallout, Ameriquest cuts 3,000 jobs

Company cites ‘very challenging non-prime market’ for extreme move

The parent company of subprime lender Ameriquest Mortgage Co. said Thursday it was slashing its work force and consolidating operations in its retail call centers and wholesale loan production offices.

It is the second wave of cuts in less than a year for Orange-based ACC Capital Holdings Corp., one of the nation’s largest subprime lenders.

ACC did not disclose how many employees would lose their jobs in the latest cost-savings move, but the Orange County Register reported that the 2,800 and 3,200 — or about half the total number of employees — would be terminated.

The company cited the “very challenging non-prime market” for the cuts.

“While extremely difficult, these changes will strengthen ACH’s financial position, increase our efficiency and improve our cost structure — enabling the company to leverage the opportunities created by consolidation in the non-prime industry,” the company said in a statement.

The cuts come amid turmoil in the subprime lending area. Lenders who specialize in making risky, higher-interest mortgages to people with blemished credit records have been tightening their lending policies as their own financing has dried up and defaults have increased.

Prior to the restructuring announced Thursday, Ameriquest operated four retail call centers nationwide. Those operations were being consolidated to Southern California, spokesman Chris Orlando said.

Wholesale loan production centers in New York operated by subsidiary Argent Mortgage Co. were being consolidated into the company’s facilities in Rolling Meadows, Ill., the company said.

Last May, Ameriquest’s parent closed 229 branch offices and laid off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations.

Those job cuts amounted to a one-third reduction of ACC Capital’s work force, which at the time stood at 11,000.

Last year, ACC agreed to pay $325 million in a multistate settlement over claims of deceptive lending practices.

The lender did not admit to any wrongdoing as part of the settlement but agreed to provide borrowers with full disclosures on the terms of loans, stop giving its lending agents financial incentives to include higher fees or other penalties on loans, and change how it handles appraisals.

ACC also operates AMC Mortgage Services Inc., formerly Bedford Home Loans.