Massachusetts Appeals Court Upholds Injunction Restricting Fremont Foreclosures In Predatory Lending Case

In Boston, Massachusetts, Reuters reports:

• A Massachusetts [appeals] court has upheld an injunction to force cash-strapped mortgage lender Fremont General Corp to halt all foreclosures in the state to give local authorities time to review each mortgage.

***

• After Fremont gives notice that it intends to foreclose, [Massachusetts Attorney General Martha] Coakley then has 45 days to object to any foreclosures that are deemed "presumptively unfair." If she objects, Fremont must get the court's approval to proceed, Coakley's statement said.

• The ruling said a loan would meet the definition of "presumptively unfair" if it was an adjustable rate mortgage with an introductory period that was three years or less, or if it had a beginning "teaser" interest rate that was at least 3 percentage points lower than the fully indexed rate.

• Such loans also included ones made to borrowers whose debt-to-income ratio would have topped 50 percent if Fremont had measured the debt by the amount due under the fully indexed rate rather than under the teaser rate.

• A loan would also be deemed "presumptively unfair" if it had a substantial penalty or one that lasted beyond the introductory period, she added.
  But the injunction does not free borrowers from having to make their monthly mortgage payments, the statement said.

For the story, see Mass. upholds ruling to halt Fremont foreclosures.

For Massachusetts AG press release, see Appeals Court Judge Upholds Preliminary Injunction Against Fremont in Predatory Lending Case.

Go here for earlier posts on the Massachsuetts court injunction imposed upon Fremont General Corp.