| Title: | Ohio Governor Signs New Predatory Lending Law |
| Source: | Industry News |
| Date: | 6/19/2006 |
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Ohio Governor Taft Signs Predatory Lending Bill
Governor Bob Taft on June 19 signed into law Senate Bill 185, which toughens Ohio's laws to prevent unscrupulous mortgage
brokers, loan officers and others from taking advantage of vulnerable consumers. The Governor signed the bill during a ceremony
at the home of Columbus residents Larry and Martha Clay, who were victims of predatory lending.
"The menace of predatory lenders has been ravaging neighborhoods in our cities, suburbs and rural communities, turning the
American dream of homeownership into a nightmare for far too many Ohioans," said Taft. "I've made combating predatory lending
one of my highest priorities, and Senate Bill 185 sends a clear message that Ohio is not the place to take advantage of homebuyers."
SB 185 implements Governor Taft's recommendations to the Ohio General Assembly, including:
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Creating remedies under the Ohio Consumer Sales Practices Act to protect consumers from abusive lending practices;
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Requiring mandatory licensure of appraisers;
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Requiring national criminal background checks for mortgage brokers, loan officers and appraisers;
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Requiring loan officers to pass their licensing exam before a license is issued;
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Providing the Attorney General with the right to directly bring injunctive actions for violations of the Ohio Mortgage Loan
Act;
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Prohibiting a mortgage broker from bribing or coercing an appraiser in order to improperly influence the appraiser's independent
judgment; and
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Requiring that certain changes to the loan terms be promptly communicated to the consumer before the closing.
The Homebuyers' Protection Act also: imposes a duty on the mortgage broker to obtain a loan advantageous to the needs of the
borrower; creates, for non-bank lenders, a duty of fair dealing to the borrower; prohibits pre-payment penalties for loans
less than $75,000, and limits the amount of such penalties for loans above that amount.
The bill goes into effect on January 1, 2007.