OHIO ATTORNEY GENERAL TO
INVESTIGATE SUBPRIME MORTGAGE
Ohio Attorney General Marc Dann stated at a press conference that his office intends to issue Civil Investigative Demand Subpoenas to companies in the subprime mortgage industry. He indicated that the subpoenas are part of ongoing investigations into possible violations of anti-trust laws, civil rights laws and the Ohio Consumer Sales Practices Act.
The Attorney General’s announcement came after no lender or servicer agreed to sign the Ohio Compact proposed by Ohio Governor Ted Strickland. In October, Governor Strickland proposed the establishment of a compact between subprime mortgage servicers and the state of Ohio designed to address the increasing number of foreclosures in Ohio. Many of the provisions of the compact would require lenders and servicers to undertake actions that are either impossible or impractical to implement. The drafter of the proposed compact apparently had little substantive knowledge of the mortgage lending industry.
The Mortgage Bankers Association and the Ohio Mortgage Bankers Association sent a letter to the Ohio Department of Commerce responding to the proposed compact and recommending a number of already existing programs that the state of Ohio could encourage mortgage servicers to take part in or adopt, rather than the proposed compact. The Director of Commerce rejected such a course of action. Now the Attorney General, at the request of the Governor and the Department of Commerce, is intending to try to use civil investigation powers to address an issue that state government does not understand and cannot control.Elizabeth Anstaett and Darrell Dreher.