Ohio AG Slams Servicer With Civil Suit; Says Homeq Peddled One-Sided Loan Modification Agreements, Violated State Consumer Protection Statutes

From the Office of the Ohio Attorney General:

• Ohio Attorney General Richard Cordray [...] announced a lawsuit filed against Barclays Capital Real Estate dba HomEq Servicing, headquartered in New York, for issuing unfair loan modification agreements and providing inadequate, incompetent customer service to Ohioans who were at risk of losing their homes to foreclosure. HomEq is a participant in the federal Home Affordable Modification Program (HAMP).

• According to the lawsuit filed [...] in Montgomery County Common Pleas Court, Ohio homeowners in need of loan modifications through HomEq to save their homes from foreclosure were forced to enter into one-sided agreements. The unfair and deceptive agreements released HomEq of all liabilities and required borrowers to waive their rights to defenses and agree to pay additional fees.

• Additionally, the lawsuit alleges that HomEq violated Ohio's Consumer Sales Practices Act (CSPA) through incompetent and inefficient customer service by failing to return consumer calls or respond to repeated inquiries, losing borrowers’ documents and failing to offer timely and affordable loss mitigation options.

For the Ohio AG press release, see Attorney General Cordray Files Suit Against HAMP Loan Servicer.

For the lawsuit, see State of Ohio v. Barclays Capital Real Estate, Inc., dba Homeq Servicing (see Exhibit A, at page 12 for sample loan modification agreement used by Homeq).