Citi May be No. 1 B&C Servicer Soon.

NEW YORK -- Citigroup has acquired the $45 billion subprime servicing portfolio of Ameriquest Mortgage, a transaction that will help it challenge Countrywide Financial Corp. for the No. 1 spot among B&C servicers.

No purchase price was disclosed. One warehouse executive who has done business with Ameriquest called the servicing platform "its crown jewel."

Ameriquest, which is now just a shell company, is based in Orange, Calif. The servicing platform is located in suburban Illinois.

Citigroup also purchased Argent Mortgage, a nonprime wholesale lender that is a sister company to Ameriquest. Both Ameriquest and Argent were owned by ACC Capital Holdings, a company controlled by industry veteran Roland Arnall.

Citigroup signed an option to buy the assets from ACC in late February. As part of the original option deal, Citigroup agreed to provide working capital to Ameriquest/Argent. (The option was set to expire this fall.)

The sale of the two divisions effectively ends Mr. Arnall's career in subprime mortgage banking. He is currently serving as ambassador to the Netherlands.

Mr. Arnall, who has rarely granted press interviews, started in the subprime business three decades ago when he ran Long Beach Savings.