Once the country's largest home-loan lender to people with credit problems, Ameriquest was accused of failing to disclose loan terms adequately between 1999 and 2005, often not describing whether a loan carried a fixed or an adjustable interest rate.

Ameriquest also allegedly improperly inflated appraisals that were used to qualify borrowers for loans, said Utah Attorney General Mark Shurtleff.

He was represented in the negotiations by assistant attorneys general Blaine Ferguson and Perri Babalis.

"Unlawful lending practices rob equity from families and destabilize neighborhoods," Shurtleff said in a statement. "This settlement helps many families and sends a strong message to all lenders to treat their customers fairly."

Added California Attorney General Edmund G. Brown Jr.: "Hard-working families trying to buy a home wound up as targets of improper sales practice. This settlement provides homebuyers with at least some of the restitution they deserve."

Restitution payments are available to more than 481,000 customers who took out loans between Jan. 1, 1999 and Dec. 31, 2005 from Ameriquest Mortgage, Town and Country Credit Corp. and AMC Mortgage Services, Inc. (formerly known as Bedford Home Loans).

Earlier this week, Shurtleff's office began sending letters and claim forms to 2,635 Utahns identified as eligible for payments. To qualify, said spokesman Paul Murphy, these Utahns must mail completed and signed forms to a settlement administrator by Sept. 10.

Consumers who opt for restitution payments relinquish the right to file lawsuits against Ameriquest over loans covered by the settlement, Murphy said.

"Consumers may want to consult with a private or legal services attorney, if they qualify, before deciding whether to participate in the settlement," he said.

Murphy added that consumers participating in the settlement "do not give up any claim they may otherwise may raise if their home goes into foreclosure. . . . The forms will indicate the minimum payment the consumer can expect to receive. The exact amount could be larger, depending on how many eligible Utah consumers relinquish their right to file lawsuits."

Forms in California, where 78,000 consumers allegedly were harmed by Ameriquest's sales tactics, indicate average payments will be around $800, Brown said.

Closely held Ameriquest's January 2006 settlement includes $295 million to pay borrowers and $30 million to pay for investigations by state officials. It is the second-largest predatory-lending agreement in history behind a $484 million settlement in 2002 with Household Finance Corp., now a unit of HSBC Holdings Plc.

mikeg@sltrib.com---

* Bloomberg News contributed to this article.