Richard Cordray (D)
COLUMBUS, Ohio (Legal Newsline) - Ohio Attorney General Richard Cordray along with the Ohio Department of Commerce, has filed suit 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.
According to Cordray, the suit claims the California-based agency failed to accurately help homeowners modify the terms of their home loans to avoid bankruptcy.
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.
The lawsuit seeks consumer restitution, civil penalties and damages as a result of the breach of the agreement.
The suit also requests that the court order Carrington to put into practice a process designed to provide a thorough and adequate customer service to all state mortgage customers.
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.