Attorney General Announces Intent to Issue
Subpoenas on Loan Servicers

November 8, 2007

Return to Predatory Lending: Developments and Pending Litigation

On Thursday, November 8, 2007, Ohio Governor Ted Strickland, Ohio Attorney General Marc Dann, Ohio Supreme Court Chief Justice Thomas Moyer, and Ohio Department of Commerce Director Kimberly Zurz held a press conference announcing significant new actions designed to prevent additional home foreclosures in Ohio.

At the press conference, Attorney General Dann criticized loan servicing companies for rejecting the Governor's Compact. Read more about the Governor's Compact here (link). Specifically, Dann stated that national mortgage loan servicing companies "had a chance to do the right thing, but did not." The Attorney General continued that the company's inactions spoke volumes about what he characterized as their "crass disregard" for borrowers who have been harmed by predatory lending tactics in Ohio.

Attorney General Dann continued by stating that he fully intended to hold national mortgage loan servicers accountable by issuing subpoenas for information and records to more than a dozen companies. The Attorney General pledged to follow up the first round of subpoenas with "hundreds" of additional subpoenas within the next year against various facets of the lending industry including servicers, investment banks, and warehouse lenders.

The Attorney General announced that the subpoenas would seek information for potential violations under antitrust laws, civil rights laws, the Ohio Consumer Sales Practice Acts, as well as common law fraud. Such actions could be initiated against entities "upstream" in the mortgage transaction, including investment banks and warehouse lenders, purportedly profiting from predatory lending. Read the Ohio AG's press release.