The parties have reached a $1.6 million settlement in an action filed against Ameriquest Mortgage Company, on behalf of all persons who obtained Ameriquest, Argent Mortgage Company, Town & Country Credit Corporation; or Olympus Mortgage Company variable rate loans between June 1, 1998, and June 30, 2003, which were secured by real properties in the State of California, and who paid a prepayment charge in excess of that permitted by the California Civil Code. Persons with outstanding loans, who might still be subject to prepayment charges from these companies should also submit claim forms. Claim forms must be postmarked no later than November 19, 2004, to be considered valid.

The $1.6 million will be allocated on a percentage basis between class members whose loans have been paid off and those whose loans are outstanding and may still be subject to prepayment charges. Class members whose loans have been paid off, and who paid excessive prepayment charges will receive a cash benefit. The cash payment will be calculated as follows: subtract the prepayment charge allowed under California law from the prepayment charge actually paid by the class member. The amount left over is the excess that the class member paid. Each claimant will receive a pro rata share of the settlement fund based on the excess that each paid.

An illustration: If $12 million in valid claims are submitted from class members with paid off loans and $3 million in valid claims are submitted from class members with outstanding loans ($15 million total), each person who has submitted a valid claim for a paid off loan will receive 10.67% of their claim amount ($1,600,000 / $15,000,000 = 10.67%). Here is a specific example: A class member had a $150,000 loan. The loan was paid off after two years at which time the interest rate was 9% and the balance was $147,854. Ameriquest charged a prepayment charge of six months’ interest, $6,653. Under California law, the prepayment charge should have been $5,303. That class member would get $144 ($6,653 - $5,303 = $1,350 x 10.67% = $144.) Note that the settlement benefit is based on the prepayment charge actually paid by the class members. If, based on this illustration, the class member had paid a prepayment charge of $6,000, they would receive a settlement check for 10.67% of the difference between $6,000 and $5,303 or $74 ($6,000 - $5,303 = $697 x 10.67% = $74).

Those class members who have not yet paid off their loans, and who submit valid claims, will receive a certificate. If a class member holding a certificate of pays off his or her loan and incurs a prepayment charge in excess of that permitted under California law, that class member must submit the certificate to Ameriquest within 60 days of the date that the loan was paid off to get a refund of the amount stated in the certificate. The dollar amount of the certificate will be calculated in a similar manner that the cash benefits to class members who have already paid off their loans is calculated. For class members with outstanding loans that are being serviced by Ameriquest and who submit valid claims, the dollar amount of their certificates will be determined as if those loans were paid off on a date which is within 14 days of the date that the court preliminarily approved the settlement. For class members with outstanding loans that are being serviced by entities other than Ameriquest, and who submit valid claims, the settlement requires that the amount of heir certificate's be determined as if those loans were paid off on the date the loan was made.

Every class member with an outstanding loan who submits a valid claim will receive a certificate for the dollar amount calculated by multiplying (1) the ratio between $1,600,000 and the cumulative dollar total for all valid claims for paid and outstanding loans by (2) the difference between (a) the contractual prepayment charge that would have been imposed had the outstanding loan paid off on the assumed dates referenced above, and (b) the prepayment charge that would have been calculated on those dates under California law.

An illustration: John Doe has a $100,000 loan that has not been paid off and remains subject to a prepayment charge. The loan is being serviced by Ameriquest. 14 days after the court’s preliminary approval of the settlement, the interest rate on the loan was 10% and the outstanding balance was $98,100.00. The contractual prepayment charge on this date would be $4,905 (six months’ interest). The prepayment charge pursuant to California law on this date would be $3,905. The difference of $1,000 is John Doe’s claim. If, as in the example cited above, a total of $15,000,000 in valid claims for paid and outstanding loans is submitted, class members with outstanding loans which remain subject to prepayment charges who submit to valid claims will receive certificates equaling 10.67% of their claim ($1,600,000 ? $15,000,000 = $10.67%). If John Doe submits a valid claim, he will receive a certificate with a dollar amount of $106.70 ($1,000 x 10.67% = $106.70). If he subsequently pays off his loan and incurs a prepayment charge in excess of that permitted under California law, John may submit his certificate to Ameriquest within 60 days of the date John pays off his loan and receive a refund on he prepayment charge of $106.70.

Persons eligible to take part in this settlement may have previously participated in another class action settlement involving Ameriquest entitled “Gilbert Finley and Rita Finley v. Ameriquest Mortgage Company et. al., Case No. 829065-6. Participation in that class action settlement does not affect the right to make a claim in this case.

Questions about the settlement may be directed to the settlement administrator at:

Gilardi & Co. LLC
P.O. Box 8060
San Rafael, CA 94912-8060

(800) 789-0311

ansvamericquest@gilardi.com

The settlement will not be effective until the court grants it final approval. The court has scheduled a hearing on the matter for November 19, 2004.