A story from the AP says, Taft signed the bill at the home of a Columbus couple who were victims of brokers who link consumers with bad credit or low-incomes with high-interest lenders.

"The menace of predatory lenders has been ravaging neighborhoods in our cities, suburbs and rural communities, turning the American dream of home ownership into a nightmare for far too long," Taft said in a statement.

Opponents in the lending industry cautioned that jittery ratings agencies could react poorly to stricter regulations and clamp down on the sale of debt on the secondary market - the chief way that lenders make quick profit on loans.

Lenders would in turn pass those costs on, thus raising monthly mortgage payments for borrowers, opponents say.

The law will not take effect until 2007 to give those ratings agencies such as Standard and Poors time to assess the bill and adjust without a drastic reaction. It also allows regulatory agencies time to prepare rules and gear up for enforcement.

The bill polices sub-prime loans, which generally carry interest rates higher than 8 percent and are designed for people who can't qualify for traditional mortgages. It bans practices such as switching loan terms at the last minute or coercing appraisers to falsely inflate home values before making a loan, which share the blame for Ohio's high foreclosure rates.

According to a press release, SB 185 implements Governor Taft's recommendations to the Ohio General Assembly, including:
· Creating remedies under the Ohio Consumer Sales Practices Act to protect consumers from abusive lending practices;
· Requiring mandatory licensure of appraisers;
· Requiring national criminal background checks for mortgage brokers, loan officers and appraisers;
· Requiring loan officers to pass their licensing exam before a license is issued;
· Providing the Attorney General with the right to directly bring injunctive actions for violations of the Ohio Mortgage Loan Act;
· Prohibiting a mortgage broker from bribing or coercing an appraiser in order to improperly influence the appraiser's independent judgment; and
· Requiring that certain changes to the loan terms be promptly communicated to the consumer before the closing.

The Homebuyers' Protection Act also: imposes a duty on the mortgage broker to obtain a loan advantageous to the needs of the borrower; creates, for non-bank lenders, a duty of fair dealing to the borrower; prohibits pre-payment penalties for loans less than $75,000, and limits the amount of such penalties for loans above that amount.

Click here to read more of this story from the AP.