http://business.bostonherald.com/realestateNews/view.bg?articleid=193202
New subprime surprise: Gov. had board ties to 2nd lender
By Scott Van Voorhis
Boston Herald Business Reporter
Friday, April 6, 2007 - Updated: 02:45 AM EST
Gov. Deval Patrick’s radio silence on the subprime lending bust - one that is already pushing hundreds of Bay State homeowners to the curb and threatens thousands more - becomes more awkward by the day.
But Patrick’s decision to stay quiet on this crisis is doubly intriguing given he oversaw, as a one-time board director of ACC Capital Holdings, not one - but two - major mortgage lenders with dubious track records.
During his years as a director of California-based ACC, Patrick collected hundreds of thousands of dollars a year for overseeing not just Ameriquest, a connection widely reported, but also its sister subprime lender, Argent. ACC is the holding company for both Ameriquest and Argent.
Ameriquest and Argent are at the top of the list when it comes to a financial plague besetting Boston’s already crime-torn neighborhoods - high-interest-rate mortgages that wind up in foreclosure.
Combined, the two companies were tied to 127 foreclosure filings in the city of Boston last year, according to John Anderson, head of the Real Estate Analyst, a foreclosure tracking service in Dorchester.
The vast majority of these struggling homeowners can be found in Roxbury, Dorchester, Mattapan and Hyde Park.
Only California-based mortgage lender Fremont can be tied to more Boston foreclosure filings, with 136 last year.
Patrick last summer stepped down from the board of ACC.
But if defending Ameriquest - and his recent phone call to Citigroup Inc. on behalf of ACC - was challenging, Patrick may be even harder pressed to present a defense of Argent.
Of the 127 foreclosure filings that involved Argent and Ameriquest loans, Argent was behind 83 of them.
“Here you have Ameriquest that writes the sleazy loans and Argent writes the really crumby ones,” said Anderson, the Dorchester housing researcher.
Patrick’s decision to stay below the radar has not gone unnoticed, even among his supporters.
His administration, so far, gets high marks for proposing a series of tough reforms - and a $5 million bailout fund for struggling homeowners.
But even amid a wave of public sympathy, pushing through a revamp of the lucrative subprime mortgage business on Beacon Hill will take all the political firepower that can be mustered, said Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations.
Secretary of State William Galvin, Attorney General Martha Coakley and Boston Mayor Thomas M. Menino have all spoken out publicly.
“It would be great if the governor would speak to this issue publicly,” Kriesberg said.
Dan O’Connell, the governor’s secretary of housing and economic development, said Patrick isn’t ducking the issue.
“His directive to me has been to aggressively and affirmatively deal with and solve the subprime lending issues,” O’Connell said.
But all eyes are on whether Patrick shows up in person next week when his Division of Banks releases a key report on the subprime mortgage meltdown.
He could come out swinging, but I wouldn’t bet the house on it.
New subprime surprise: Gov. had board ties to 2nd lender
By Scott Van Voorhis
Boston Herald Business Reporter
Friday, April 6, 2007 - Updated: 02:45 AM EST
Gov. Deval Patrick’s radio silence on the subprime lending bust - one that is already pushing hundreds of Bay State homeowners to the curb and threatens thousands more - becomes more awkward by the day.
But Patrick’s decision to stay quiet on this crisis is doubly intriguing given he oversaw, as a one-time board director of ACC Capital Holdings, not one - but two - major mortgage lenders with dubious track records.
During his years as a director of California-based ACC, Patrick collected hundreds of thousands of dollars a year for overseeing not just Ameriquest, a connection widely reported, but also its sister subprime lender, Argent. ACC is the holding company for both Ameriquest and Argent.
Ameriquest and Argent are at the top of the list when it comes to a financial plague besetting Boston’s already crime-torn neighborhoods - high-interest-rate mortgages that wind up in foreclosure.
Combined, the two companies were tied to 127 foreclosure filings in the city of Boston last year, according to John Anderson, head of the Real Estate Analyst, a foreclosure tracking service in Dorchester.
The vast majority of these struggling homeowners can be found in Roxbury, Dorchester, Mattapan and Hyde Park.
Only California-based mortgage lender Fremont can be tied to more Boston foreclosure filings, with 136 last year.
Patrick last summer stepped down from the board of ACC.
But if defending Ameriquest - and his recent phone call to Citigroup Inc. on behalf of ACC - was challenging, Patrick may be even harder pressed to present a defense of Argent.
Of the 127 foreclosure filings that involved Argent and Ameriquest loans, Argent was behind 83 of them.
“Here you have Ameriquest that writes the sleazy loans and Argent writes the really crumby ones,” said Anderson, the Dorchester housing researcher.
Patrick’s decision to stay below the radar has not gone unnoticed, even among his supporters.
His administration, so far, gets high marks for proposing a series of tough reforms - and a $5 million bailout fund for struggling homeowners.
But even amid a wave of public sympathy, pushing through a revamp of the lucrative subprime mortgage business on Beacon Hill will take all the political firepower that can be mustered, said Joseph Kriesberg, president of the Massachusetts Association of Community Development Corporations.
Secretary of State William Galvin, Attorney General Martha Coakley and Boston Mayor Thomas M. Menino have all spoken out publicly.
“It would be great if the governor would speak to this issue publicly,” Kriesberg said.
Dan O’Connell, the governor’s secretary of housing and economic development, said Patrick isn’t ducking the issue.
“His directive to me has been to aggressively and affirmatively deal with and solve the subprime lending issues,” O’Connell said.
But all eyes are on whether Patrick shows up in person next week when his Division of Banks releases a key report on the subprime mortgage meltdown.
He could come out swinging, but I wouldn’t bet the house on it.
