Predatory Lending: Developments and Pending Litigation

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The Ohio General Assembly approved legislation, S.B. 185, effective January 1, 2007, designed to better protect consumers from predatory lenders. This latest legislative effort comes four years after the Ohio General Assembly enacted the Mortgage Brokers Licensure Act (Senate Bill 76) and Predatory Lending legislation (House Bill 386). Since the passage of this legislation, the Ohio Governor has been involved in the negotiation of a voluntary "Compact" with loan servicers and the Ohio Supreme Court has initiated a foreclosure mediation program to help qualified homeowners stay in their homes.

So that our clients can stay informed regarding these issues, we have summarized below some of the relevant developments on the topic of predatory lending in Ohio: 

Decision Made in City of Cleveland Subprime Lending Case
May 2009
In early 2008, City of Cleveland filed a lawsuit against various corporate defendants asserting a claim for public nuisance arising out of subprime lending in Cleveland. The United States District Court for the Northern District of Ohio recently issued a decision granting all of the defendants' Rule 12(b)(6) motions to dismiss. The City of Cleveland has already stated publicly that it intends to appeal. For more information, see the May 15 decision City of Cleveland v. Ameriquest Mortgage.

Federal Courts Require Assignments of Note and Mortgage Prior to Filing Foreclosures: Do State Courts Follow Suit?
April 2008
Discussion of federal court foreclosures and their ramifications for state court foreclosures.

Ohio Agrees to Terms of a New "Compact" with 9 Loan Servicers
April 2008
Bulletin discussing the new compact entered into between the State of Ohio and nine national mortgage loan servicers.

The Ohio Supreme Court's Foreclosure Mediation Model
April 2008
Full text of the foreclosure mediation model of the Ohio Supreme Court

Summary of the Ohio Foreclosure Prevention Task Force Recommendations
September 2007
Bulletin on the recommendations of the Ohio Foreclosure Prevention Task Force adopted on September 10, 2007.

Ohio Foreclosure Prevention Task Force Recommendations
September 2007
Full text of the recommendations of the Ohio Foreclosure Prevention Task Force

Ohio Supreme Court Reviews Home Rule Authority in the Context of Predatory Lending
November 2006
On November 20, 2006, the Ohio Supreme Court issued a decision examining municipal home rule authority to enact ordinances regulating predatory lending practices.