Ameriquest, the privately held subprime lender reported to be seeking to sell itself, is in advanced negotiations with a "potential partner," a spokesman said on Tuesday.
Rising delinquencies and defaults among subprime borrowers, or people with weak credit, have cut into subprime lenders' earnings, forced some into bankruptcy, and spurred other companies to sell themselves.
Citigrouphas been reported to be interested in buying Ameriquest. A spokesman for Citi was not immediately available for comment.
A spokesman for Ameriquest said, "It's been widely reported that Ameriquest is exploring strategic alternatives. That process is progressing well. We're in the advanced stages of negotiations with a potential partner." He declined to comment further.
Ameriquest was the 12th-largest lender of home loans to people with weak credit in the third quarter, but in the same quarter in 2005, was the third-largest, according to National Mortgage News.