Ohio Attorney General's Office to go after Predatory Lending Practices
The Ohio legislature recently passed a new bill to stop deceptive mortgage lending practices, which are responsible for the state's high foreclosure rate. Once Governor Bob Taft's signature makes the bill official, the focus turns to Jim Petro, Ohio's Attorney General, to enforce it, according to the Columbus Dispatch.
According to the Columbus Dispatch, the mortgage industry is a new territory for the attorney general's office. Unlike most other states, Ohio's mortgage industry has been exempted from the state's Consumer Sales Practices Act, which gives the attorney general the power to protect consumers. However, Senate Bill 185 ends this exemption for mortgage brokers and non-bank lenders.
The attorney general's office will be drafting new rules to implement the bill, such as a reader-friendly list of what constitutes deceptive or predatory lending practices, which must be handed out to potential borrowers after January 1, 2007.
According to the Columbus Dispatch, Luther Liggett, a lobbyist for the Ohio Mortgage Bankers Association, stated that his biggest worry is that the attorney general will resort to lawsuits too quickly instead of mediating disputes. Liggett expects that this will lead to less available credit and higher costs for borrowers, though bill supporters have disagreed.