| Ohio Attorney General Servicer Lawsuit |
| Thursday, 10 September 2009 | |
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Following a joint lawsuit by the Ohio Attorney General's Office and Ohio Department of Commerce filed in July, Ohio Attorney General Richard Cordray announced he is investigating additional organizations for future litigation.Following is a report from Reuters on these recent developments. More mortgage servicers will be sued: Ohio attorney general COLUMBUS, Ohio (Reuters) - Ohio Attorney General Richard Cordray said on Tuesday he is plans to sue more mortgage companies over dealings with troubled homeowners in an effort to break the foreclosure crisis. "We're not looking for charity, what were looking for is good, solid customer service for Ohio's homeowners," he told Reuters in an interview. "Foreclosures lead to abandoned homes that bring additional costs that have to be paid by our communities, not the mortgage companies and not the servicers." "They (mortgage companies) know they won't have to bear those costs and they don't give a hoot," he added. Cordray said his investigations of mortgage servicing companies have extended beyond that of Carrington Mortgage Services, which he sued in July for failing to make good faith efforts to prevent foreclosures, and incompetence. Ohio's Attorney General said he could not disclose the names of companies that are likely to be sued as investigations by his office are still in progress. Cordray added that he has informed the possibility of further lawsuits with the U.S. Treasury Department and Justice Department and said they "welcomed" the impetus this may provide for other mortgage servicers to improve their loan modification procedures. Ohio, which had the 12th highest foreclosure rate in the nation for the first half of 2009, is pursuing the worst offenders first in the hopes that others will improve practices on their own in order to escape litigation, Cordray said. "We'd rather not sue everyone, but we will if we have to," he said. "If we have to sue a dozen of them, then we'll sue a dozen." "If that's the kind of policing we have to do then we're glad to do it," he added. Servicing companies have found themselves at the forefront of the battle to curb the home foreclosures that helped push the economy into recession, and are threatening to stall a nascent recovery. Their practices of collecting payments and easing loan terms where possible have drawn increased scrutiny in recent months amid signs that foreclosures are rising despite their efforts. A slow response by servicers over President Barack Obama's Home Affordable Modification Program (HAMP) has also led to a rebuke by the U.S. Treasury. Cordray said the discovery process in court would allow his office to more closely examine servicers procedures. Whether it be incompetence or greed -- through charging excessive fees for handling loan modification requests -- servicers have not yet hired enough people to provide sufficient customer service to stricken homeowners, he added. "I think we will then have a better sense of whether their representations (about helping homeowners) are accurate," he said. Cordray said his office has received "hundreds, if not thousands of complaints" from home owners over endless fees and appalling customer service -- phone calls not being returned, documents going missing and servicers reneging on promises to modify individual loans. In Carrington's case, Cordray alleged the Santa Ana, California-based company broke an agreement with Ohio to resolve a dispute over the state's litigation against New Century Financial Corp., a defunct subprime lender. Carrington said in July after the lawsuit was announced that it remained committed to helping U.S. homeowners. Carrington's parent, Carrington Capital Management, purchased New Century's servicing unit in 2007. But Cordray said that in general mortgage companies have not lived up to their public promises to help stricken borrowers. "We want to make sure servicers are not just paying lip service to the loan modification process," he said. "We want them to show enough commitment." To view the online article, please click here. About Safeguard Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.
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