Ohio Court of Appeals Recognizes Mortgage Loan Act Alternative Interest Rate
The Court of Appeals of Ohio, Tenth Appellate District, reversed the judgment of the Franklin County Municipal Court, holding that Section 1321.571 of the Ohio Mortgage Loan Act (MLA) expressly allows a registrant to provide an alternative interest rate up to 25 percent, as long as the amount is part of a consensual contract between the parties. Ohio Neighborhood Finance, Inc. v. Massey, Nos. 10AP-1020, 10AP-1121 (Ohio Ct. App., May 5, 2011). The trial court had reduced the interest rate to 4% based on the court’s mistaken reading of the MLA.
The Tenth Appellate Court decision recognizing the authority to contract for 25% interest under the MLA is consistent with reported decisions in the fourth, fifth, sixth, seventh, eighth and ninth appellate districts.
- Elizabeth Anstaett and Darrell Dreher