Mortgage Watchdog in the Works

Attempts at state regulation for the mortgage industry failed in the past. A bill that was presented to the house today may change all that, giving borrowers the ability to sue the bad apples of the industry and placing the lenders and brokers under the Consumer Sales Practices Act. The center of attention at this point is Ohio, with the nation’s highest rate of foreclosure, more than triple that of the nation’s average. It is also one of only two states that do not regulate their mortgage industry with the federal act. Ohio politicians are hoping that the reform will help level the playing field for homeowners.

The reform would likely include required licensing of appraisers, to prevent lenders from influencing those who determine a property’s value. The package would also try to limit the amount of fraudulent claims against lenders, clearing the legal systems for those cases that need attention. The next three months will include a hearing and dispatches, which will likely point fingers at lax control by the state for the high foreclosure rate. Savings and loans, banks and other depositors will probably be left out of the reform, since the federal government already monitors them.