Cordray plans more lawsuits against mortgage companies

Chris Rizo Sep. 15, 2009, 5:14pm

Richard Cordray (D)

COLUMBUS, Ohio (Legal Newsline)-- Ohio Attorney General Richard Cordray said Tuesday that he plans to pursue more mortgage companies over their business practices.

The first-term Democrat said mortgage firms have broken state consumer protection laws.

"We're not looking for charity, what were looking for is good, solid customer service for Ohio's homeowners," Cordray told Reuters. "Foreclosures lead to abandoned homes that bring additional costs that have to be paid by our communities, not the mortgage companies and not the servicers."

Reuters reported that the attorney general said he could not disclose the names of companies that are likely to be sued by his office. He did, however, say that his office may file some lawsuits in conjunction with the U.S. Treasury Department.

Ohio had the 12th highest foreclosure rate in the nation for the first half of 2009. Cordray said the state is pursuing the worst offenders.

"We'd rather not sue everyone, but we will if we have to," he was quoted as saying. "If we have to sue a dozen of them, then we'll sue a dozen."

Earlier this month, Cordray and the Ohio Department of Commerce filed a lawsuit against Carrington Mortgage Services LLC over allegations the company violated the state's Consumer Sales Practices Act.

The joint lawsuit stems from a January 2008 breach of contract between the state and Carrington, which would have allowed over 100 homeowners to modify their loans made by subprime lender New Century Financial Corp.

The lawsuit also alleges Carrington failed to investigate and resolve consumer complaints in a timely manner, did not offer loss mitigation options to borrowers and pressured homeowners into signing "unfair" loan modification documents, according to Cordray.

"This lawsuit makes it clear that we have reached zero tolerance for this kind of behavior from loan servicers," Corday said in a statement at the time.

Since taking office in January, Cordray has filed five lawsuits and 25 cease-and-desist demands against firms allegedly operating home mortgage rescue scams in the state.

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