Ameriquest, ACORN Join on Low-Income Loan Program

In an unusual alliance, a major mortgage company has joined with a community group that recently denounced it to provide $360 million in home loans for thousands of low-income families in 10 cities, including Los Angeles.

Officials of Orange-based Ameriquest Mortgage Co. and the Assn. of Community Organizations for Reform Now, a combative group known as ACORN, announced the three-year pilot program Wednesday.

It offers home borrowers protection from lending practices considered by policymakers to be abusive, such as excessive interest rates and fees, prepayment penalties and balloon payments.

Borrowers, in turn, must participate in ACORN’s financial counseling and education program.

The home loans will be available starting in early September to an estimated 10,000 families in certain areas of Los Angeles, as well as Oakland, Albuquerque, Baltimore, Chicago, Dallas, Houston, Jersey City, N.J., Philadelphia and St. Louis.

“ACORN and Ameriquest will unite in helping families gain high-quality housing, with a range of consumer safeguards and education that will also help them achieve long-term financial security,” said Kirk Langs, president of Ameriquest.

The accord came after months of negotiations between top officials of Ameriquest, one of the nation’s largest lenders to people with damaged credit, and ACORN, known for its protests and sit-ins against big companies.

It also comes when abusive home lending practices are in the public spotlight. Policymakers are looking at ways to curb so-called predatory lending, in which lenders seek out low-income, minority and elderly borrowers and charge unfairly high interest rates and fees.

In addition to the $360 million, Ameriquest promised to provide borrowers with full and timely disclosure of loan terms and conditions in plain English and restrict practices that ACORN had called abusive.