1100 West Town and Country Road, Orange
Arguably, the worldwide financial crisis of 2008 began in this sixteen-story office tower, which was the headquarters of Ameriquest Mortgage Company, the pioneer of subprime mortgage lending not only for Orange County but for the nation.
Ameriquest began in 1979 as Roland Arnall’s Long Beach Savings. Taking advantage of banking deregulation, in 1990 Long Beach Savings issued the first publicly traded securities-backed mortgage. They sold high-fee mortgages to people with poor credit, then packaged those mortgages into complicated investment opportunities, claiming to spread out the risk through bundling that earned them a AAA investment rating. One of their advertising slogans was “Don’t judge too quickly. We won’t.”
Long Beach Savings moved to Orange in 1991, and—after a court accused it of predatory lending targeting older, female, and minority borrowers—split into privately held Ameriquest and a publicly traded subsidiary. Customers and former employers accused Ameriquest of illegal lending practices, including falsifying appraisals, fabricating borrowers’ incomes, forging documents, and imposing hidden fees, but it nevertheless inspired other subprime mortgage lenders. Its former executives went on to form ResMae Mortgage Company in Brea and Encore Credit Corp in Irvine. In 2005, the United States’ four largest subprime mortgage lenders were all in Orange County: Ameriquest with its spinoff Argent Mortgage in Orange, New Century Mortgage in Irvine, Fremont Investment and Loan in Brea, and Option One Mortgage in Irvine.
Ameriquest advertised widely on television, the Internet, blimps, NASCAR cars, a Rolling Stones tour, a pro sports stadium, and a Super Bowl halftime show, with the slogan “Proud sponsor of the American Dream.” That fantasy imploded when the housing bubble burst and investors lost confidence in the poorly regulated mortgage-backed securities that Ameriquest had pioneered. Credit markets tightened, stock markets crashed worldwide, and the US lost nine million jobs in 2008 and 2009. In 2007 alone, the Orange County Register calculated that forty-three mortgage companies in Orange County had laid off 7,200 workers here and 35,000 workers nationwide. Office parks sat empty, including this one. Ameriquest went out of business in the financial crisis that its lending helped to cause.
Orange County had already bounced back from its own bankruptcy in 1994, when overleveraged county investments caused the largest municipal bankruptcy in the US, one now largely forgotten. Similarly, the wealthy mortgage lenders of Orange County generally bounced back from the crisis of 2007. It was their clients who faced underwater mortgages, foreclosures, and layoffs. The US stock market rebounded to its 2007 level by 2012, but the number of jobs did not rebound until 2014. This particular office tower still has substantial vacancies on nearly every floor, and its marble lobby is gleaming but empty.
To Learn More
- Gittelsohn, John. “How Subprime Lending All Started in O.C.” Orange County Register, December 30, 2007.
- Hudson, Mike, and E. Scott Reckard. “Workers Say Lender Ran ‘Boiler Rooms.’” Los Angeles Times, February 4, 2005.
- Katz, Alyssa. Our Lot: How Real Estate Came to Own Us. New York: Bloomsbury, 2009.
Image: Orange Executive Tower, 2020, photo by Brande Jackson