Archive

November 6, 2009

Ross Servicing Unit Sued by Ohio Over Loan Mods

Ohio's attorney general is suing American Home Mortgage Servicing — a business controlled by vulture fund investor Wilbur Ross — accusing the company of what the state calls "incompetent and inadequate customer service." State attorney general Richard Cordray levied a plethora of charges against AHMS, including failure to offer loan modifications on a timely basis and "unfair and deceptive" loan practices. According to the lawsuit, AHMS required loan modification agreements that forced consumers to pay excessive fees and waive their rights in order to get help. The suit also alleges that the terms of loan modifications were unconscionably one-sided in favor of AHMS. Mr. Ross built AHMS from two failed nonprime servicers: Option One Mortgage and American Home Mortgage. AHMS is based in Coppell, Texas. It services more than 12,000 subprime and prime consumers in Ohio, according to the AG. Mr. Cordray is seeking a permanent injunction against AHMS. The servicer, though, is fighting back. It is countersuing the state, saying the allegations are false and cannot be supported. AHMS EVP and chief legal officer Jordan Dorchuck said the firm is committed to "keeping borrowers in their homes." It says it tried to meet with the Ohio AG to discuss the issues raised it the lawsuit but the state refused.