Magellan Mortgage Corporation, Columbus, Ohio, Highland Banc, Inc., Columbus, Ohio, and two individuals, a loan officer and an appraiser, were name in a complaint filed by the Ohio Attorney General's Office and the Ohio Department of Commerce.The complaint alleges unfair, deceptive and unconscionable acts and practices. The complaints were filed in the Franklin County Court of Common Pleas.

The lawsuits against Highland Banc and Magellan Mortgage raise many violations of the Ohio Homebuyers Protection Act, in addition to multiple violations of the Ohio Mortgage Broker Act (OMBA), and the Real Estate Settlement Procedures Act (RESPA). The suit against Magellan also alleges that the company violated the Truth in Lending Act (TILA). Some of the allegations in the suits were that a mortgage broker arranged loans with undisclosed fees and loans that resulted in no net tangible benefit for homeowners who had no reasonable ability to repay the loans.

The two lawsuits demand that the companies and individuals reimburse all consumers who were harmed by their actions and to pay civil penalties of $25,000 for each violation. The Attorney General is asking the Court to prohibit the Defendants from engaging in any business practices until restitution and penalties have been paid. The Department of Commerce is also seeking injunctive relief to prohibit the brokers from continuing to violate the Mortgage Broker Act, and to keep all business records available for inspection.

“Our investigation of these two businesses reveal rampant disregard for the Homebuyers Protection Act, which was passed in Ohio to eliminate these types of predatory loan practices,” said Consumer Protection Chief Nadine Ballard. “We will continue to aggressively pursue injunctions and impose severe penalties against any broker who misleads consumers into loans they cannot afford.”