Massachusetts AG Settles Subprime Suit; Fremont To Cough Up $10M

In Boston, Massachusetts, The Associated Press reports:

• A bankrupt California-based subprime mortgage lender has agreed to pay $10 million to settle allegations of unfair practices that contributed to the current spike in Massachusetts home foreclosures. Massachusetts Attorney General Martha Coakley said Tuesday that Fremont Investment & Loan and its parent company, Fremont General Corp., will pay $8 million in consumer relief, $1 million in civil penalties and $1 million in costs, including attorney fees.

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• The settlement also makes permanent a preliminary injunction issued by the Superior Court last year, barring the company from pursuing foreclosure of "presumptively unfair" mortgage loans without court approval.

Source: Massachusetts settles with mortgage lender.

For more from the Massachusetts Attorney General's Office, see:

• Press release: Attorney General Martha Coakley Reaches $10 Million Settlement with Subprime Lender Fremont Investment and Loan (Thousands of homeowners protected from foreclosure),
• Consent Judgment: Commonwealth of Massachusetts v. Fremont Investment & Loan, et al.

For the Massachusetts Supreme Judicial Court decision ruling that subprime loans that lenders knew or should have known were unsustainable are illegal (ie. as unfair and deceptive business practices in violation of M.G.L. c. 93A, § 4 of the Massachusetts statutes), see Commonwealth of Massachusetts v. Fremont Investment & Loan, 452 Mass. 733; 897 N.E.2d 548; 2008 Mass. LEXIS 797 (Ma. 2008) (for a possibly easier to read version with all the footnotes appearing at the end of the case, try here). UndoMortgageLoans TILAdelta