Richard Cordray (D)
CLEVELAND (Legal Newsline) – Ohio Attorney General Richard Cordray has filed a lawsuit against a Texas-based mortgage company that services over 12,000 subprime and prime mortgage loans in Ohio over numerous violations of the state's Consumer Sales Practices Act.
American Home Mortgage Servicing, Inc. is alleged to have violated the Ohio Consumer Sales Practices Act through its incompetent and inadequate customer service, failure to respond to requests for assistance, failure to offer timely or affordable loss mitigation options to borrowers, and unfair and deceptive loan modification terms, the lawsuit alleges.
AHMSI's loan modification agreements, according to the lawsuit, forced consumers into paying excessive fees and to waive their rights in order to receive aid. The lawsuit also alleges that the terms for loan modification were unconscionably one-sided in AHMSI's favor.
A permanent injunction is sought through the lawsuit to stop AHMSI from the continuation of unfair and deceptive loan modification practices. The lawsuit also seeks consumer restitution, civil penalties and damages and request s that the court order AHMSI to implement processes designed to provide efficient, competent and adequate customer service to all of its Ohio mortgage customers.
The lawsuit, filed in the Cuyahoga County Common Pleas Court, is Cordray's second lawsuit against a loan servicer company.
"For far too long there has been little to no accountability for those who take advantage of the dire circumstances of home foreclosure," Cordray said. "The acts of some mortgage servicers have gone beyond the point of being negligent—they have become predatory financial practices and in Ohio, they won't be tolerated."
Cordray became the first state attorney general to sue a loan servicer for unfair and deceptive loan modifications with his July lawsuit against Carrington Mortgage Services, LLC. That lawsuit is currently in litigation in the Franklin County Court of Common Please. Carrington, as of Sept. 30, has voluntarily implemented a 60-day moratorium on home foreclosures.