Free Republic

Citigroup Inc. bolstered the finances of the Ameriquest companies Wednesday by providing new funds, setting up a major credit line and getting an option to buy some operations of the specialist in high-cost mortgages to high-risk buyers. Los Angeles billionaire Roland E. Arnall, Ameriquest's principal owner and the U.S. ambassador to the Netherlands, also will provide a cash infusion, the Orange-based sub-prime lending company said. It didn't specify how much new capital would flow into the businesses. Citigroup also would become the chief "warehouse" lender for the operations, providing credit to fund loans and hold them until they are packaged...

Federal bank regulators announced a crackdown on loose lending standards on subprime home mortgages, as two major lenders struggled to cope with losses and regulatory problems. New Century Financial Corp., one of the nation's largest subprime lenders, announced that it has been informed of a federal criminal inquiry into its accounting and trading in its securities. New Century also said that a failure to obtain waivers from lenders could prompt its auditors to warn of "substantial doubt" over its ability to remain in business. Another big lender, Fremont General Corp., said it plans to stop making subprime residential loans and...