Amherst woman sues Ameriquest over loan practices

Letters started going out earlier this month notifying former Ameriquest borrowers they may eligible for a small piece of a $325 million predatory lending settlement.

Rosemary Gilroy of Amherst hasn’t received such a letter yet, but even if she did, she says she wouldn’t participate in an agreement in which average offer was around $250.

“I am losing $500 a day in interest payments,” said Gilroy, a former commercial property owner who filed a federal suit on her own alleging that Ameriquest engaged in predatory practices in lending her money to finance conversion of several industrial condos in Amherst into residential properties.

On Monday, the U.S. District Court in Concord ruled that Gilroy could proceed on her case without an attorney and bring the nation’s largest subprime lender into court, because, if what she alleges is true, it could be in violation of state and federal law.

Here are the facts, according to Gilroy:

Gilroy sold some commercial property in Massachusetts, and in March 2000, used the proceeds to purchase five New Hampshire condos that were being used for office space, converting one of them into her own residence.

But the high-tech bubble soon burst, leaving most of the properties vacant. So in 2004, she attempted to convert them into residential properties and asked Ameriquest to finance the conversion.

The company, against her wishes, insisted that her residence be included. As a result, the $790,000 borrowed — $190,000 over the original amount — was more than she needed and more than she could pay with an income of $697 a month in Social Security. In March, she refinanced again on one of the units, increasing her total debt to $937,000.

Ameriquest provided mortgages to her with the sole intention of foreclosing on her property and acquiring $500,000 that she had invested in the property prior to refinancing with Ameriquest, Gilroy alleges.

She says she is now in danger of losing about $1.2 million of equity in the property.

Ameriquest could not be reached for comment on the case. But it has, without admitting wrongdoing, agreed to pay $325 million to 49 states to settle a class-action suit over alleged predatory lending practices.

New Hampshire was supposed to receive $2.6 million of that settlement, with an estimated $1.7 million going to directly to about 6,000 borrowers. (Calls to the New Hampshire Banking Department for more updated figures were not returned by deadline.)

But for Gilroy – who is in her 60s – any award she might get from the settlement wouldn’t begin to dig her out of the hole she finds herself in. While she did agree to borrow the money, Ameriquest never should have lent it, she says.

“Due to my age, I didn’t know how to do this. I never should have been funded. I was bound to lose my shirt doing this. I’m not that young, and this whole thing has worn me out,” Gilroy told NHBR Daily. — BOB SANDERS