Ameriquest Mortgage, the largest American subprime lender as recently as 2005, is closing.
Citigroup said today that it had agreed to buy the wholesale mortgage origination and servicing assets of Ameriquest’s parent, ACC Capital Holdings, for an undisclosed price.
The acquisition includes servicing rights on $45 billion of loans, as well as a small amount of other loans and residuals. Citigroup had obtained an option to buy the assets in February as part of an agreement to provide funds to keep ACC in business.
ACC, meanwhile, “is preparing the orderly wind down of its retail mortgage business, which is no longer accepting applications,” said Chris Orlando, a spokesman. The company is based in Orange, Calif.
Roland Arnall, now the United States ambassador to the Netherlands, founded ACC in 1979, and his wife, Dawn, is ACC’s chairman, according to their official government biographies. Roland Arnall remains the company’s principal owner, Mr. Orlando said.
Subprime lenders make loans to people with poor credit. The industry has been battered in recent months as defaults rose and investors stopped buying home loans that were being made.
Ameriquest was the first major subprime lender to downsize in the current housing cycle, deciding in May 2006 to close all 229 retail branches and cut 3,800 jobs.
Jeffrey Perlowitz, Citigroup’s head of global securitized markets, said in a statement that the transaction “allows Citigroup to secure valuable and scalable platforms in a market undergoing significant change.”
ACC’s vice chairman, Adam Bass, in a statement called the transaction “a positive step” for customers and employees.
Mr. Orlando, ACC’s spokesman, declined to disclose Ameriquest’s recent loan volumes or employee base.
Citigroup’s purchase is scheduled to close on Saturday.
Ameriquest, a Subprime Lender, Is Closing - New York Times