Ameriquest Mortgage Co., has agreed to a judgment that will require it to clearly disclose loan terms and fees, not tamper with appraisals and set aside $26.6 million to pay restitution to California customers.

The judgment, entered Tuesday in Alameda County, spells out terms of a previously announced $325 million deal between Ameriquest and prosecutors in 49 states that in addition to the $26.6 million for California includes $175 million in nationwide restitution payments. Both sets of payments could raise restitution to customers throughout California to as high as $50 million, prosecutors said.

Prosecutors accused Ameriquest of using "bait and switch" and other misleading sales tactics, hiding loans' financial terms and prepayment penalties, arranging inflated property appraisals and encouraging prospective borrowers to fabricate income statements.
Ameriquest, based in Orange, denied any wrongdoing.

The injunction, which applies to Ameriquest's retail offices, requires the company to provide customers' with a one-page disclosure stating clearly whether it is fixed or variable rate. The disclosure, which must be handed over three days before the loan closes, must also reveal a loan's size, fees, points, monthly payments, interest rate and maximum prepayment penalties, and it must be available in Spanish or any other languages in which Ameriquest advertises.

The injunction also requires that Ameriquest tie loan terms to credit risk, limit its role in the appraisal process and protect whistle blowers. It forbids payment of sales incentives for getting consumers to agree to prepayment penalties and bars the company from soliciting refinancing transactions during the first 24 months of a variable interest mortgage.