Exploding Mortgages, II

Exploding mortgages are back in the news. Ameriquest, the huge finance company whose website comforts potential borrowers with promises of ‘personal attention’ needed to help with the ‘lonely process’ of getting a mortgage was evidently providing ‘stalker-like’ personal attention and has now agreed to roll back its aggressive practices — practices that left many of its customers with exploding mortgages. Customers like 69-year old Carolyn Pittman, a widow with a heart problem who has difficulty reading and who, apparently, succumbed to Ameriquest’s high pressure sales practices and took a mortgage that overvalued her home and was padded with illegal fees. Her Ameriquest mortgage exploded. She now faces foreclosure and the loss of her home and equity. Under the terms of this settlement, if she were to accept it, Ms. Pittman would get a few hundred bucks.

Showing some of that ‘personal attention’, an Ameriquest spokesperson said of Ms. Pittman, “Her story is unfortunate.” The head of Ameriquest, in contrast, merely expressed ‘regret’ that thousands of customers got exploding mortgages because of the unethical sales practices that Ameriquest now promises to change. At a few hundred bucks per victim, it’s a sweet deal for the company that has become a household brand name through it’s TV and other advertising in support of the “American Dream”. Through the predatory practices, fees and rates it has charged folks like Ms. Pittman, Ameriquest has made claims for values (“American Dream”) while keeping its eye on value — on profits, winning and generating wealth for it’s executives and shareholders on the backs of 69-year old widows with heart problems and difficulties reading.

Indeed, one might ask all the employees of Ameriquest — the thick we who share fates with one another and, thereby, whose character as human beings highly correlates with the character of Ameriquest’s brand — ‘what do you stand for?” And, if you stand for helping all people achieve the American Dream, then why did you use predatory practices, fees and rates to provide folks with exploding mortgages? And, as the ill effects of these practices became more known to you, why did it take the efforts of 49 states to bring about the changes you’ve just announced with this settlement.

There’s a word for the damage done in our new world of markets, networks and organizations by this kind of extreme, fundamental dedication to value without values (or, the reverse): terrorism.

Posted by Doug Smith on January 24, 2006 08:56 PM | Permalink

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