COLUMBUS, Ohio - Now that Ohio's new predatory lending law is in effect, Attorney General Marc Dann has filed complaints against 10 companies for violating consumer protection laws.
Dann said Thusday he is beginning an effort to crack down on mortgage brokers, lenders and other entities involved in arranging mortgage loans.
"Predatory lending is driving Ohio's shameful home foreclosure rate," Dann said. "Today's crackdown on appraisal fraud will help protect consumers and move us one step closer to driving unscrupulous lenders out of our communities."
The complaints, spread out among four counties, allege each company of knowingly compensating, instructing, inducing, coercing or intimidating appraisers for the purpose of improperly influencing the independent appraisal process.
Appraisal inflation occurs, Dann says, when the appraisal value of a home is much higher than the true market value. He says the companies "puffed up" the value to the desired loan amount as opposed to the actual value of a property.
"I'm committed to ridding this state of appraisal inflation and other symptoms of mortgage fraud that has ripped families apart and led to an unprecedented number of foreclosures in this state," Dann said. "I won't allow this unethical exertion of power over appraisers who face this choice of doing the right thing or losing business entirely to continue."
Dann is asking for each company to be fined a civil penalty of $25,000 and pay reimbursement for all consumers damaged.
He also wants an order requiring the defendants to maintain all business records related to transactions in Ohio for a period of five years.
The defendants are: Ace Mortgage Funding, Premiere Service Mortgage, Island Financial, Sage Credit Co., Wall Street Mortgage Bankers, All Line Appraisals, Apex Mortgage Services, American Home Brokerage, The Valley Mortgage Group, First Ohio Bank and Lending.