Ohio goes after mortgage servicing firms: lessons you can learn

You have to give it to the attorney general of Ohio. The dude's got ... well ... he's just got 'em.

One by one, step by step, he has been going after mortgage servicing companies. These are the firms that collect monthly loan payments and also manage foreclosures.

Just since this past summer, Richard Cordray has brought suit against both Carrington Mortgage Services and American Home Mortgage Servicing.

Now, he has turned his attention to HomeEq, a unit of Barclays Capital. He claims the firm is "using unfair and deceptive agreements and violating state consumer law," according to a Reuters dispatch.

Among other things, the Ohio AG alleges that HomEq came up with schemes that "released itself of all liabilities and required borrowers to waive their rights to defenses and pay more fees," says the Reuters report.

For its part, a HomEq spokesman dismisses the suit as "meritless" and vows an aggressive defense.

Regardless of the outcome of this particular lawsuit, there are lessons to be learned by all mortgage holders, and especially those facing or who are in foreclosure, no matter what part of the United States they happen to reside in: Companies such as Barclays' HomeEq, after all, operate in jurisdictions across America. Keeping up with how states other than the one you live in are dealing with such companies can and will help you identify practices that may be unethical, deceptive, unfair or illegal.

When you suspect such practices, you need to alert the attorney general's office of your own state to see if it might want to take legal action such as what the AG of Ohio has done. In fact, it is not uncommon for attorneys general from various states to band together for one, big class action suit.

In the meantime, it is nice to know that the attorney general of Ohio, at least, is on the ball! You must be, too.

Charles Feldman is a journalist, media consultant and the co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle."

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