Roland E. Arnall, 68; Founded High-Risk Lender Ameriquest
Thursday, March 20, 2008
Ameriquest Mortgage founder Roland E. Arnall, 68, a billionaire who became a symbol of the subprime lending industry he helped create, died March 17 at the University of California at Los Angeles Medical Center. Esophageal cancer was diagnosed last week.
Mr. Arnall, a Holocaust survivor who co-founded the Simon Wiesenthal Center, had resigned as President Bush's ambassador to the Netherlands on March 7, returning to Los Angeles to be with a seriously ill son who had Hodgkin's disease.
Intensely private about his business and charitable affairs, Mr. Arnall built a real estate and financial services empire that transformed him into one of the nation's wealthiest people, with his fortune estimated last year at $1.5 billion by Forbes magazine.
Once the nation's largest subprime mortgage lender, Ameriquest was shadowed by accusations that it engaged in improper practices that included lying about borrowers' income to qualify them for loans they couldn't afford. Ameriquest advertised heavily on television, sent blimps soaring above stadiums bearing the company's name and Liberty Bell logo and sponsored a Super Bowl halftime show and a Rolling Stones tour.
Former employees said Ameriquest ran "boiler rooms" of loan agents who socked borrowers with hidden fees and higher-than-promised interest rates while steering customers into loans they couldn't afford.
Mr. Arnall blamed the problems on rogue agents and said they were fired. While he was under investigation by a task force of state attorneys general, his confirmation as ambassador was held up in the Senate until his company agreed to pay $325 million to settle with 49 states and the District.
The remnants of Ameriquest, which Mr. Arnall founded in 1979, were sold to Citigroup last year.
Even Mr. Arnall's harshest critics said it was difficult to reconcile the complaints with the man they knew as a benefactor of animal shelters, a 16-year trustee of the California State University system and a diplomat who strove to build bridges to the Islamic community in Europe and the United States.
Born March 29, 1939, on the eve of World War II to Eastern European Jews who had fled to Paris, Mr. Arnall spent his early childhood in a French village where his family pretended to be Roman Catholic. He wasn't told he was Jewish until after the war. His family soon moved to Canada, then to the United States, where he had his first business, selling flowers on the streets of Los Angeles.
Mr. Arnall amassed huge interests in apartments and other businesses. But he was chiefly known as a pioneer of lending to high-risk, or "subprime," borrowers. Using databases to identify customers and set loan terms, he partnered with Wall Street companies that provided funding and bundled his loans into mortgage-backed bonds, the business whose recent meltdown has shaken the global financial system.
He was a gregarious character known for befriending service workers he encountered and some of the most powerful politicians in the country.
A major supporter of Bush and Republican Gov. Arnold Schwarzenegger, Mr. Arnall and his second wife, Dawn, gave more than $12 million to GOP causes and candidates, becoming the heaviest donors to the 2004 election cycle, according to campaign finance records.
Mr. Arnall said he backed Bush because of his support for Israel. He said he supported people, not parties, and continued to donate to certain Democrats, including many members of the Latino caucus in the California legislature.
Even as he gave $1.4 million to Schwarzenegger and his campaign committees, the Arnalls donated $130,000 to former California governor Gray Davis, a Democrat, and $100,000 to oppose Davis's recall.
In addition to his wife, survivors include a son, Daniel; a daughter, Michelle; nephew Adam Bass, former vice chairman of Ameriquest; and a brother, Claude.