Sloggin' Along

Having just spent about 3 hours on-line running stats in CRIS and updating my neighborhood description and market conditions for the new City of New Franklin, I decided to check the news and caught this article about consumer debt :

http://www.foxnews.com/printer_friendly_story/0,3566,292872,00.html

I have to say, the efforts of the Dems in regard to credit and personal finance way outshine anything that is being reported about Rep efforts. Waiting for Congress to act in a responsible manner on this, however, is like waiting for latex-based paint to dry on the bottom of the ocean.

Article I, Section 10 of the Constitution prohibits any State from making any "Law impairing the Obligation of Contracts" as well as "lay[ing] any Imposts or Duties on Import or Exports", but is silent on the regulation and licensing of commerce within the individual states. If state legislators had any sense of responsibility toward the people, they would consider limitations on the usurious practices of the credit card companies. In particular, when an entity does business within a jurisdiction, it should be required to file all legal claims within that jurisdiction. The clauses which creditors use to require action against them in the jurisdiction of other states effectively shields them from many small (and VERY irritating) complaints regarding their abusive practices.

SB 185 in Ohio ( http://www.legislature.state.oh.us/bills.cfm?ID=126_SB_185 ) , Section 1321.57, contains some restrictions on abusive lending practices. Of particular interest is :

"Sec. 1345.031. (A) No supplier shall commit an unconscionable act or practice concerning a consumer transaction in connection with a residential mortgage. Such an unconscionable act or practice by a supplier violates this section whether it occurs before, during, or after the transaction.

(B) For purposes of division (A) of this section, the following acts or practices of a supplier in connection with such a transaction are unconscionable:

(1) Arranging for or making a mortgage loan that provides for an interest rate applicable after default that is higher than the interest rate that applies before default, excluding rates of interest for judgments applicable to the mortgage loan under section 1343.02 or 1343.03 of the Revised Code and also excluding interest rate changes in a variable rate loan transaction otherwise consistent with the provisions of the loan documents;"

Why can this not be extended to apply to consumer credit as well?

FOOTNOTE: A few days ago I asked an attorney whether the practice by lenders of using a Broker Price Opinion instead of an appraisal to provide a value opinion in a foreclosure action was allowed by SB 185. It clearly is ... a big loophole:

"Sec. 4763.19. (A) Subject to division (B) of this section, no person shall perform a real estate appraisal for a mortgage loan if the person is not licensed or certified under this chapter to do the appraisal.

(B) Division (A) of this section does not apply to a lender using a market analysis or price opinion, an internal valuation analysis, or an automated valuation model or report based on an automated valuation model, and any person providing that report to the lender, in performing a valuation for purposes of a loan application, as long as the lender does both of the following:

(1) Gives the consumer loan applicant a copy of any written market analysis or price opinion or valuation report based on an automated valuation model;

(2) Includes a disclaimer on the consumer's copy specifying that the valuation used for purposes of the application was obtained from a market analysis or price opinion or automated valuation model report and not from a person licensed or certified under this chapter."

I was concerned that I might have wandered into a grey area by doing work for the courts that sets the fee based on the value amount (which is unethical according to USPAP, but allowed under the Jurisdictional Exception Rule). I find that SB 185 also says, :

"Sec. 4763.12. (A) A person licensed or certified under this chapter may be retained or employed to act as a disinterested third party in rendering an unbiased valuation or analysis of real estate or to provide specialized services to facilitate the client or employer's objectives. An appraisal or appraisal report rendered by a certificate holder or licensee shall comply with this chapter. A certified appraisal or certified appraisal report represents to the public that it satisfies the standards set forth in this chapter.

(B) No certificate holder or licensee shall accept a fee for an appraisal assignment that is contingent, in whole or in part, upon the reporting of a predetermined estimate, analysis, or opinion or upon the opinion, conclusion, or valuation reached, or upon consequences resulting from the appraisal assignment. A certificate holder or licensee who enters into an agreement to provide specialized services may charge a fixed fee or a fee that is contingent upon the results achieved by the specialized services, provided that this fact is clearly stated in each oral report rendered pursuant to the agreement, and the existence of the contingent fee arrangement is clearly stated in a prominent place on each written report and in each letter of transmittal and certification statement made by the certificate holder or licensee within that report." (my bolds)

So it is legal for me to work for the court under the court's rules. Whew! For a while there I was afraid I had been committing a first degree misdemeanor.