LOS ANGELES—The parent of Ameriquest Mortgage Co. will pay up to $50 million in restitution for California borrowers as part of a settlement brokered with state attorneys general over claims of deceptive lending practices, a prosecutor said Tuesday.

Some 725,000 borrowers in 49 states will be eligible to recover part of their losses through the $325 million settlement agreement.

“California is getting by far the largest share,” said Tom Papageorge, a deputy district attorney in Los Angeles County. “We had about 22 percent of all Ameriquest loans by volume of dollars.”

A judge finalized the settlement amount on Tuesday, he said.

The settlement applies to Ameriquest customers who took out loans between 1999 and 2005. It covers ACC Capital Holdings Corp., Ameriquest Mortgage Co.’s holding company, and also applies to subsidiaries Town & Country Credit Corp. and AMC Mortgage Services Inc., formerly Bedford Home Loans.

Borrowers who decide not to opt for the settlement or who have already pursued separate litigation will not be eligible for restitution under the state agreement, Papageorge said.

Ameriquest is expected to split its payments to the states into four installments. As a result, qualified borrowers in California aren’t expected to see any money before next year.

Ameriquest customers who took out loans between Jan. 1, 1999, and April 1, 2003 could get a minimum of around $600. The state hasn’t determined how much money borrowers who fall outside that period will get.

The state will hire an outside firm to handle the payments, Papageorge said.

Ameriquest, the nation’s largest sub-prime mortgage lender, did not admit to any wrongdoing as part of its settlement but agreed to reform several of its business practices.

The changes include providing borrowers with full disclosures on the terms of their loans, ceasing to give its lending agents financial incentives to include higher fees or other penalties on loans, and changing how it handles appraisals.

The company also agreed to submit to independent monitoring for five years.

____

On the Net:

http://www.ameriquestmortgage.com