State Court Judge Halts Fremont Foreclosures In Massachusetts

In Massachusetts, The Boston Globe reports:

• A Massachusetts court, in an unprecedented decision yesterday, ordered the California subprime lender Fremont Investment & Loan to halt all foreclosures to give state officials time to review each mortgage. The order, issued yesterday by the Suffolk Superior Court, is the latest action in an October lawsuit filed by Massachusetts Attorney General Martha Coakley that alleged Fremont engaged in predatory and unfair lending when it made home loans to individuals who often could not afford them.

• In a 29-page order, Justice Ralph Gants said a large share of Fremont's mortgage loans could potentially be considered "structurally unfair" under the state's lending laws. The mortgages were unfair, he said, if they met four criteria, including low introductory rates that shot up once that initial period ended. The attorney general's office said the order applies to about 2,200 mortgages. The state is also seeking financial relief for borrowers, an unknown number of whom are in foreclosure. "There are no precedents like this in Massachusetts," said Boston lawyer Gary Klein, who represents borrowers in suits against mortgage companies. "It's an extremely important decision that recognizes the extreme hardship that predatory lending has on Massachusetts borrowers."

For more, see Lender ordered to halt foreclosures.

See also, The Boston Herald: Judge slows foreclosures (Lender’s loans called ‘unfair’ under Mass. law):

• [G]ants’ decision only covers owner-occupied units bought with certain loans, such as no-money-down, two- or three-year adjustable-rate mortgages (ARMs). The judge also stressed that he’s not permanently excusing homeowners from repaying loans. “The spirit of this decision is (merely) that Fremont, having helped borrowers get into this mess, now must take reasonable steps to help them get out of it,” Gants wrote.