Ameriquest Mortgage agreed last week to pay at least $7 million to settle predatory lending allegations in Connecticut, one of some two dozen states that are investigating the subprime lender's business practices. Whether the inquiries are a result of the lender's extraordinary public advertising campaigns piquing the attention of state attorneys general, or actual patterns of predatory lending, one of the lawsuits could bring other whole-loan market participants into the fold of litigation, sources report.

So far, state investigators have not singled out any secondary market participants for their role in purchasing subprime loans that end up being tagged as predatory, said Donald Lampe, a partner at law firm Womble Carlyle Sandridge & Rice, who focuses on predatory lending issues and counts some of the largest U.S. subprime mortgage lenders among his clients. Instead investigators have focused on the actual loan originators, but that could change, he added. Ameriquest was the largest subprime mortgage lender last year with roughly $82.7 billion in origination volume.

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