A peek into the boiler room

From the United States District Court – Minnesota

DECLARATION OF MARK BOMCHILL (PDF)
(Hat tip to http://patrick.net for the link.)

1. My name is Mark Bomchill. I am over eighteen years of age and of sound mind. I was employed by Ameriquest Mortgage Company at the Plymouth, Minnesota branch of Ameriquest, from September 2002 through September 2003. My job title at Ameriquest was Account Executive. There were approximately 20 Account Executives in the Plymouth branch office. During my tenure at Ameriquest, I closed approximately 90-100 mortgage loans.
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3. When I started my employment with Ameriquest, I received training demonstrating and encouraging high pressure sales tactics. Such training included watching a series of videos relating to mortgage sales tactics featuring Dale Vermillion. Account Executives were also shown scenes from “Boiler Room,” a movie about unethical and illegal high pressure sales practices by a securities brokerage firm. Account Executives were also provided with scripts, including those integrated within Ameriquest’s computer systems such as the SNAP system. The scripts were on such issues as encouraging consolidation of debt, and for responding to objections by potential borrowers. I believe that all of the Account Executives in Minnesota (and nationwide) received this same training and the same scripts.
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5. The branch manager and area manager constantly pushed Account Executives to make as many phone calls as possible to solicit loan sales. Every day, there were numerous “Power Hours” during which the Account Executives were required to only make phone calls. The area manager was responsible for at least several branch offices within Minnesota.
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6. Account Executives were required to make at least 100 sales calls per day if we had a significant number of applications in process. Otherwise, we were required to make 150-200 sales phone calls per day. I recall on at least one occasion, that the regional manager (to whom the area managers reported) came to the Plymouth branch and told the Account
Executives that we needed to be closing at least 8-10 loans per month in order to get any promotion.
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8. Ameriquest’s compensation plan was structured so that Account Executives would not make any significant amount of money until we reached a certain sales volume. For example, there was one bonus for the number of closed loans. Originally, Account Executives would receive this bonus for closing 5 loans in a month. During my tenure at Ameriquest, the quota for this bonus was increased to 8 loans a month and then to 10 loans a month. Additionally, commissions were based upon revenue generated through closed loans.
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12. Ameriquest taught and encouraged Account Executives through scripts and otherwise to promote mortgage loans as a means of consolidating existing unsecured debt (including even such debt as automobile loans) with Ameriquest, and to mislead customers into believing that such loans would save them money when they would not.
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13. Ameriquest trained and encouraged Account Executives through scripts and otherwise to encourage borrowers to take cash out from their mortgage loans for things such as home repairs or vacations, in order to increase the total loan amount.
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15. It was a common and open practice at Ameriquest for Account Executives to forge or alter borrower information or loan documents. For example, I saw Account Executives openly engage in conduct such as altering borrowers’ W-2 Forms or pay stubs, photocopying borrower signatures and copying them onto other, unsigned documents, and similar conduct.
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16. The culture at Ameriquest encouraged Account Executives to engage in any conduct necessary to close the loan, to close the loan as quickly as possible, and to maximize the total loan amount.
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17. I was taught and encouraged to close loans without regard to the customers’ financial ability to make payments on the loan.