Taft Wants Safeguards Against Predatory Lending
Posted November 13, 2005 in Press Releases
by Diane Erwin
Ohio has the highest foreclosure rate in the nation, so Gov. Bob Taft is calling on the Legislature to enact sweeping safeguards to protect homebuyers from predatory lending.
"Any legislation is a positive step forward, but it remains to be seen if the state will have the means to follow up on violations," said Tina Koumoutsos, executive director of the Neighborhood Housing Partnership.
"If so, it's fantastic," she said.
Rep. Ross McGregor, R-Springfield, praised Taft for his response. "I'm glad he also recognizes predatory lending is a problem in the state," he said.
Last month McGregor introduced a bill in the House that would require some of the surplus funds in the Department of Commerce to be used to enforce current predatory lending laws.
Clark County has the state's fourth highest foreclosure rate, according to a report released earlier this year by Policy Matters Ohio. The Cleveland-based research institute released data that showed 894 foreclosures were filed in Clark County in 2004, or one foreclosure for every 159 people.
"I would like the state to be known to be No. 1 in many things,"
McGregor said. "This is not one of them."
Taft wrote to Republican leaders on Thursday recommending that lawmakers remove a provision that exempts mortgage brokers and lenders from a state law prohibiting deceptive sales practices.
Removing the exemption would open up brokers and lenders to lawsuits by the attorney general and individual borrowers who think they have been cheated or misled.
Taft also wants lawmakers to tighten licensing and enforcement of mortgage brokers, lenders, appraisers and title companies; allow the state to suspend licenses automatically for misbehavior and require more-explicit disclosures to borrowers about the terms of a loan.
"Where the rubber meets the road will determine the effect of the legislation," Koumoutsos said.
If agencies respond to violations, victims of predatory lending will have a resource in which to turn, she said.
Oftentimes they don't have the means to pursue legal action on their own.
Consumer groups and Democrats welcomed Taft's support, saying it would be important in pushing through changes that have stalled for several years in the Republican-controlled legislature.
Senate President Bill Harris and other Republicans have indicated recently that they are reconsidering reform proposals that they rejected several years ago.
The Associated Press contributed to this article.