Nominee Talk for Loan Exec

He built Orange-based Ameriquest Capital Corp. into the nation’s largest “sub-prime” mortgage lender. Could the next job for Roland E. Arnall be U.S. ambassador to the Netherlands?

A Dutch newspaper reported Friday that the Los Angeles billionaire was under consideration for the post. The White House declined to comment, but Arnall didn’t exactly squelch speculation.

“Mr. Arnall would be willing and honored to serve his country in any way he might be asked,” said Charles Sipkins, a spokesman for the company. “But, such decisions are up to the president of the United States.”

The report of the possible new job came on the same day that a judge approved Ameriquest’s agreement to pay up to $50 million to borrowers who claimed to be victims of “bait and switch” tactics by the company.

The deal settles a 5-year-old class-action lawsuit on behalf of thousands of Ameriquest customers in California, Texas, Alabama and Alaska who said their annual percentage rates turned out to be higher than initially promised.

“It’s a very good result, an excellent result in my opinion, for the class members -- and for the public at large,” said San Mateo County Superior Court Judge Carol L. Mittlestaedt.

Typically, sub-prime customers have bad credit, heavy debt loads or other issues that prevent them from qualifying for lower-cost, prime loans. In many cases, Mittlestaedt said, these customers were forced to accept changed -- and less favorable -- terms when their loans closed because they were too financially hard-pressed to shop around.

Mittlestaedt rejected a bid to delay approval, which was made by attorneys pressing a separate lawsuit against Ameriquest in San Francisco federal court. Lawyers in the federal case argued that the terms were inadequate, and that notice of the pending deal should have been distributed in Spanish as well as English.

In turning aside those arguments, Mittlestaedt noted that both sides in the state court case had been represented by “some of the finest attorneys in the country.”

Aaron Myers, one of the lawyers in the federal case, said he would appeal the approval of the settlement. He said Mittlestaedt should have allowed him to present more evidence that large numbers of Ameriquest borrowers who speak only Spanish either didn’t get the settlement agreement at all, or didn’t understand it.

Niall McCarthy, who represented the plaintiffs in the state case, said the settlement was significant. He noted that Ameriquest had promised to provide a website where borrowers could review their loans and instantly see whether changes in the terms were made.

“No other sub-prime lender is doing that,” McCarthy said.

The company, which originated $37 billion in loans in the first nine months of last year, bills itself as a “Proud Sponsor of the American Dream” by making home loans widely available.

Over the years, company founder Arnall has won friends on both sides of the political aisle, backing Democrats including former California governors Edmund G. “Jerry” Brown Jr. and Gray Davis as well as Republicans such as Gov. Arnold Schwarzenegger.

Arnall has emerged as a major contributor to President Bush and other Republicans in recent years. Privately held Ameriquest and its subsidiaries gave $1 million to Bush’s second inauguration celebrated this year.

The Dutch newspaper de Volkskrant reported Friday that Arnall, who was born in Paris in 1939, was likely to be put up for the ambassadorship as a “thank you” for his generosity toward Bush.

White House spokeswoman Erin Healy declined to comment on the report.

“We don’t speculate on personnel matters,” Healy said.

According to published reports, Clifford Sobel, the current ambassador to the Netherlands, is considering returning stateside to run for the U.S. Senate seat now held by Jon Corzine (D-N.J.), who is expected to run for governor of New Jersey in 2006.

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Times staff writers Warren Vieth and An Moonen and special correspondent Mike Hudson contributed to this report.