Ohio’s bid to crack down on predatory mortgage lending and curb its sky-high foreclosure rate appeared to gain new momentum Tuesday, as Republican state senators unveiled a compromise bill to be introduced today in committee, the Cincinnati Enquirer reported.
Republican Sens. Joy Padgett and John Carey announced a bill that would expand Ohio’s Consumer Sales Practices Act to cover most mortgage brokers and loan officers, reports said. The change would give the Ohio attorney general’s office authority to prosecute offenders as opposed to the weaker regulatory oversight by the Department of Commerce, according to reports.
“The attorney general is the teeth,” Padgett told the Enquirer. “This is a good bill. It won’t stop foreclosures in Ohio, but it can address those due to predatory lending.”
Padgett said with support from Ohio Senate President Bill Harris, she’s confident the committee could send the bill to the floor within a month, according to reports.
The state’s foreclosure rate is the worst in the nation, according to the Mortgage Bankers Association. Despite federal probes of mortgage fraud in Greater Cincinnati and Dayton and questions about the rising foreclosure rate across the state, the General Assembly has studied the issue for a couple of years but enacted no laws, reports said.
Democratic Sen. Tom Roberts, who has pushed for expanding consumer protection in home lending for six years, called the substitute bill SB 185 “a strong step in the right direction” toward protecting consumers, the Enquirer reported. He said a loophole in the proposal made it fall short of overseeing brokers and mortgage companies affiliated with banks but added the clause was “not a deal-breaker” in earning his support, reports said.
“This finally gives us more protection for homeowners,” the senator told the Enquirer.
Padgett said bank-affiliated brokers and mortgage companies are already subject to federal regulation and have not been the source of consumer complaints, reports said.
Ohio’s nearly 3.2 percent foreclosure rate at the end of third-quarter 2005 is the nation’s highest, according to the Mortgage Bankers Association. The national average was just under 1 percent, the MBA said.
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