Cordray Files Second Suit Against Mortgage Servicers – 11/5/2009
(CLEVELAND)—Ohio Attorney General Richard Cordray today filed a lawsuit against American Home Mortgage Servicing Inc. (AHMSI), a Texas-based company servicing more than 12,000 subprime and prime mortgage loans in Ohio. The lawsuit alleges numerous violations of the Ohio Consumer Sales Practices Act including but not limited to: 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.
Today’s filing in Cuyahoga County Common Pleas Court marks Cordray’s second lawsuit against a loan servicer company, positioning Ohio as the lead state nationally in holding servicers accountable in the wake of the foreclosure crisis.
“For far too long there has been little to no accountability for those who take advantage of the dire circumstances of home foreclosure,” said Cordray. “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.”
According to the lawsuit, AHMSI required loan modification agreements that forced consumers to pay excessive fees and waive their rights in order to get help. The suit also alleges that the terms of loan modifications were unconscionably one-sided in favor of AHMSI.
The lawsuit seeks a permanent injunction from the continuation of unfair and deceptive loan modification practices, consumer restitution, civil penalties and damages. It also requests that the court order AHMSI to implement processes designed to provide efficient, competent and adequate customer service to all of its Ohio mortgage customers. To read the full complaint, go to www.OhioAttorneyGeneral.gov/AHMSIComplaint.
In July, Cordray was the first state Attorney General to sue a loan servicer for unfair and deceptive loan modifications. The case against Carrington Mortgage Services, LLC., is currently in litigation in Franklin County Court of Common Pleas. As of Sept. 30, Carrington implemented a voluntary 60-day moratorium on home foreclosures.
Cordray warns consumers to watch for the following red flags when entering into a loan modification:
•Agreements in which you waive your right to take legal action against the servicer or to challenge the foreclosure process. Look for words like “borrower has no right of set-off or counterclaim” or “no defense related to the loan or the property.”
•Demands for advance payment of extra fees not included in the agreement, such as taxes, attorney fees and insurance costs.
•Failure to return your calls or respond to inquiries in a timely matter.
•Failure to respond to you entirely.
•Lost documents.
Consumers who feel that they are victims of unfair or deceptive loan modification practices should contact the Attorney General’s Office at (800) 282-0515 or www.SpeakOutOhio.gov.
For assistance with loan modifications or help in a foreclosure situation, contact Save the Dream at (888) 404-4674 or www.SaveTheDream.ohio.gov.
From: The Ohio AG
{ 1 comment… read it below or add one }
Dear Attorney General,
I am very pleased with your efforts as I am one of numerous mortgage holders with AHMSI. The company refuses to work with me on the sale of my home in Toledo, Ohio. I relocated to Tulsa, Oklahoma for a new job and can not afford to pay the mortgage at $1,500 per month while renting a home in my new location.
AHMSI will not work with me to sell the property and I get disconnected constantly when dealing with them on the phone. They are rude and condescending during all communication and I have attempted to work with them for the last four months.
The pain this has caused me is tremendous. When I took the time to write them a detailed letter about removing the escrow account the reply stated that my signature didn’t match the signature on file, thus, they would not process the request. My first year half taxes and insurance were paid, but they would not remove the escrow for the last half year taxes while the house was up for sale.
When I updated my personal profile of employment and relocation information I inquired about a short sale. They told me to get a buyer to sign a binding contract and send it in with my bank statements for them to review the offer. Then a decision would be made to accept the offer or refuse it.
I finally have an offer and we are in the process of sending it to them. The pay off on the property is $154,000 and the offer will be around $100,000 due to market conditions, but why do I have to send them my bank statements? I have paid the mortgage on-time for 14 years and only recently have I missed two payments due to relocation. AHMSI could care less about my situation and their demeanor on the phone hurts very badly.
I have struggled for 9 months to find employment and paid through September 2009, but they refuse to give me advice on the outcome of the pending sale. Justice must be brought to the table for those of us who chose the proper path instead of walking away. I spent three months repairing the property and restoring it to it’s original state. The house is in beautiful shape and sits empty. Please help dear sirs with my endeavor. I am an honest hard working American with no hope of selling this property in a decent manner.
Sincerely,
Thomas J. Sype
Loan #4000471245