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.

***

• 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

Mass AG Sues Fremont Alleging Unfair/Deceptive Lending & Loan Servicing Practices

(original post - 10-6-07)
From the Office of the Massachusetts Attorney General:

• Today [Friday], Attorney General Martha Coakley filed a lawsuit in Suffolk Superior Court against California-based Fremont General and Fremont Investment and Loan (“Fremont”), a subprime lender that originated thousands of loans in Massachusetts. The complaint alleges that Fremont engaged in unfair and deceptive conduct on a broad scale in connection with selling mortgage loans to Massachusetts consumers...

• The Attorney General’s Office is seeking civil penalties, restitution and an injunction, which would prohibit Fremont from selling or transferring any Massachusetts mortgages and from foreclosing on any Massachusetts loan without giving the Attorney General’s Office a 90-day opportunity to review the loan transaction and object to the foreclosure.

The lawsuit alleges unfair and deceptive conduct in connection with both the origination of mortgage loans, and the subsequent servicing of those loans. For more, see Attorney General Martha Coakley Files Lawsuit Against National Mortgage Lender - Fremont Investment And Loan (First Case Under 2004 Predatory Home Practices Act).

See also:

• Mass. AG sues subprime lender (The Boston Globe),
• AG Coakley sues big subprime lender Fremont (The Boston Herald).

Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics yak

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.

Subprime Loans That Lenders Knew Or Should Have Known Were Unsustainable Are Illegal, Says Massachusetts High Court

The Boston Herald reports:

• The Bay State’s highest court has issued a landmark ruling tentatively declaring whole classes of subprime mortgages unfair under Massachusetts law. “Originating loans with terms that in combination would lead predictably to . . . default and foreclosure (is) within established concepts of unfairness,” state Supreme Judicial Court justices unanimously ruled yesterday. The decision upholds a lower-court injunction issued against subprime-lending giant Fremont Investment & Loan.

• Suffolk Superior Court Judge Ralph Gants handed down the injunction in February, declaring - apparently for the first time in state history - that some subprime-mortgage terms automatically violate Massachusetts law.

• Ruling in a lawsuit brought by state Attorney General Martha Coakley, Gants found that many of Fremont’s Bay State subprime loans seemed “doomed to foreclosure” from the start. The judge ordered Fremont to give Coakley’s office a chance to object before foreclosing on any of 2,700 Massachusetts subprime mortgages with terms Gants deemed “structurally unfair.”

• Last month, the judge issued a similar injunction against Option One Mortgage, which oversees another 8,000 questionable Massachusetts subprime loans. Although Gants’ rulings are preliminary, and subject to change as cases work their way through courts, experts still see yesterday’s SJC move as precedent-setting.

• “We think this is an important milestone not just for Massachusetts, but also for other states that want to use their consumer-protection powers against unfair and deceptive (mortgage) marketing,” Coakley said.

For the story, see High court hits subprime lenders.

See also:

• Massachusetts Supreme Judicial Court decision: Commonwealth vs. Fremont Investment & Loan (for a possibly easier to read version with all the footnotes appearing at the end of the case, try here),
• Massachusetts Attorney General press release,
• Massachusetts Lawyers Weekly: SJC restricts ‘subprime’ foreclosures,
• The National Law Journal: Mass. High Court Upholds Order Restricting Subprime Lender From Foreclosing.

For posts that reference the failure of some mortgage lenders and their attorneys to prove ownership of the promissory note when starting foreclosure actions, Go Here, Go Here, Go Here, and Go Here. missing mortgage foreclosure docs gamma SloppyForeclosuresAlpha

Judge Prohibits Fremont From Unloading Massachusetts Loans Without Buyer Consent To Abide By Court Mandate

In Massachusetts, the Boston Business Journal reports:

• Massachusetts Attorney General Martha Coakley's office said Tuesday it has obtained an expanded preliminary injunction order against California-based Fremont Investment & Loan. [...] The expanded injunction prohibits Fremont from assigning or selling Mass. loans owned by Fremont, or the servicing obligations on those loans, unless the buyer agrees in writing to be bound by the obligations set forth in a preliminary injunction, which was issued February 25.

Coakley reportedly said, "This decision reflects that lenders cannot escape responsibility for their illegal conduct and contribution to the foreclosure crisis simply by selling off their loans or servicing rights." For more, see Mass. AG gets expanded injunction against subprime lender Fremont.

See also:

• Massachusetts AG press release - Attorney General Martha Coakley Obtains Expanded Preliminary Injunction Against Subprime Lnder Fremont Investment And Loan,
• Court Order Modifying Preliminary Injunction,
• Preliminary Injunction: Commonwealth of Massachusetts v. Fremont Investment & Loan.

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.

Two Lenders Targeted In Mass. Class Actions Over Toxic "Payment Option, Pick-A-Payment" Loans; Could Slam Brakes On In-State Wells, BofA Foreclosures

In Boston, Massachusetts, The Boston Globe reports:

• A Boston attorney has filed lawsuits against two major lenders claiming they knew - or should have known - their mortgage loans that can grow bigger over time were unaffordable to borrowers.(1) The suits are being watched locally and nationally because, if successful, they would provide strength to advocates and litigators struggling to make lenders accountable for “toxic’’ mortgage loans that have pushed millions of Americans into foreclosure. “If this case goes forward, it will be a model throughout the country,’’ said Suffolk University law professor Kathleen C. Engel.

• Gary Klein,(2) of the law firm Roddy, Klein and Ryan, sought class-action status for his suits this summer against Bank of America Home Mortgage and Wells Fargo Home Mortgage, saying that hundreds of Massachusetts borrowers ultimately will be unable to afford their mortgages. A decision on class- action status is pending. “The lending community created these toxic products and masked their effect with complicated loan provisions that borrowers had no chance of understanding,’’ Klein said. “I find that appalling.’’ Bank of America officials said in a statement that “the lawsuit is without merit.’’

***

• The suits are grounded in a landmark 2008 state Supreme Judicial Court decision(3) that lenders were violating state law by writing loans that were almost certain to lead to default and foreclosure. The decision, Engel said, was the first in the country to hold lenders accountable for unfair practices, even when the terms of a mortgage are considered legal. The court decision upheld arguments by Attorney General Martha Coakley that the California-based lender Fremont Investment & Loan was selling risky products it knew would fail. In June, Coakley settled with the lender for $10 million to help struggling homeowners and cover legal costs [go here for Fremont Consent Judgment].

For more, see Attorney sues lenders, says they created ‘toxic’ products.

For the lawsuits, see:

• Hart v. Bank of America Home Loans Inc, et al.,
• Bettinelli v. Wells Fargo Home Mortgage, Inc.

(1) According to the story, Klein filed the lawsuits in US District Court in June and July focusing on so-called “payment option’’ mortgages, which allow borrowers to make minimum monthly payments on home loans. From the day the paperwork is signed, any unpaid interest is added to the balance. Eventually, the day of reckoning comes - usually after five years - and a borrower is required to make payments that cover the full mortgage interest and swelling principal. “Pick-a-payment’’ loans became popular in 2005 and 2006 as borrowers strained to afford skyrocketing home prices, or sought money to make investments or home improvements.

(2) Last year, Klein filed a class action lawsuit that could stop hundreds of foreclosures and reverse thousands of others where it challenged lenders' right to foreclose where they couldn't prove ownership of the promissory notes. See Thousands Of Foreclosures Are Void, Says Massachusetts Class Action Demanding Lenders & Their Lawyers Prove Note Ownership.

(3) 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, §2 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, try here). UndoMortgageLoans TILAdelta

Mass AG Seeks Injunction Freezing 500 Fremont Foreclosures

In Massachusettts, The Boston Globe reports:

• The Massachusetts attorney general asked a state court yesterday to block Fremont Investment & Loan from commencing foreclosure actions against 500 borrowers in Massachusetts. Attorney General Martha Coakley had previously filed suit in October accusing Fremont of predatory and unfair lending practices, and yesterday attorneys from her office told a Suffolk Superior Court judge the state wants to review each mortgage that is subject to foreclosure and try to stop proceedings on any loans they believe were made fraudulently.

***

• Many Fremont loans had lower teaser rates that rose after two years, often pushing borrowers' payments beyond their ability to pay. Fremont mortgages were "a recipe for disaster," and Fremont was aware its mortgages contained "multiple layers of risk" to borrowers, [assistant attorney general Jean] Healey said. In the request for an injunction, state lawyers argued the loans were "structurally unfair" and Fremont made them without regard to borrowers' ability to pay.

For more, see State asks court to halt 500 foreclosures by Fremont.

Go here for a West Tisbury, MA lawsuit against Fremont alleging predatory practices.

Mass AG Makes Mortgage Mod Deal With Owner Of 200 "Fremont" Loans Subject To Foreclosure Injunction & Lawsuit Alleging Unfair/Deceptive Practices

From the office of the Massachusetts Attorney General:

• Attorney General Martha Coakley has entered into an agreement with California based WMD Capital Markets, LLC that provides significant benefits to approximately 200 borrowers holding structurally unfair loans originated by Fremont Investment & Loan (“Fremont”). WMD Capital Markets recently purchased the Fremont-originated loans, which are subject to a preliminary injunction [original injunction, expanded injunction] restricting foreclosures, issued by Suffolk Superior Court in February 2008.

• The Attorney General’s Office and WMD Capital Markets reached an agreement to memorialize how Fremont-originated loans would be modified in order to avoid unnecessary foreclosures and account for Fremont’s unfair and deceptive lending practices that are the subject of the Attorney General’s law enforcement action against California-based Fremont.

Among the things WMD has specifically agreed to, according to the press release, are:

• Permanently reset the applicable interest rate to the borrowers’ introductory rate,
• In lieu of a loan modification, offer delinquent borrowers a relocation payment for one year after the agreement,(1) which is designed to help those borrowers who are unable to afford their mortgage loan, even after a downward adjustment of the monthly payment.

For the rest of the Mass AG press release, see AG Martha Coakley Enters into Affordable Loan Modification and Foreclosure Prevention Agreement with Purchaser of Fremont Loans.

See also, MarketWatch: WMD Capital Markets Purchases $65 Million in Massachusetts Mortgages (Deal Offers Homeowners New Financial Alternatives).

Go here for other posts on the battle between the Mass AG and Fremont Investment & Loan.

(1) The amount of the relocation payment was initially announced by the Mass AG's office as ranging from approximately $10,000 to $25,000. The reference to the relocation payment amount has since been removed by the AG's office. UndoMortgageLoans TILAdelta

Bay State Appeals Court Green-Lights AG's Probe Into Notorious Foreclosure Mill For Possible Violations Of Massachusetts UDAP Statute In Dealings With Financially Strapped Homeowners, Tenants Living In Foreclosed Homes

In Boston, Massachusetts, The Boston Globe reports:

• Massachusetts Attorney General Martha Coakley on Monday applauded a state Appeals Court decision that gave her permission — once again — to investigate a Newton law firm specializing in home foreclosures.
  
  The recent unanimous court ruling affirmed a 2011 Suffolk Superior Court decision allowing Coakley’s office to continue examining Harmon Law Offices for alleged “unfair and deceptive acts” related to the firm’s foreclosure and eviction work.(1)
  
  “This strong ruling upholds this office’s investigatory power,’’ Coakley said in a statement. “Harmon Law Offices had a vital obligation to follow Massachusetts law and court orders. Our office will continue to fully investigate this case and take action if appropriate.”
  
  The decision is the latest development in a long-simmering dispute between the state and Harmon, one of the largest law firms specializing in foreclosures in Massachusetts. In 2010, Harmon Law sought court protection to stop or modify the attorney general’s efforts to seek certain legal documents. Among other issues, Harmon argued the demand interfered with attorney-client privilege and that it was the conduct of the firm’s clients, not its attorneys, that was in question.
  
  Associate Justice Ariane D. Vuono, who wrote the five-page decision made by a three-member panel, said the lower court judge’s ruling in favor of the state was sound.
  
  “Harmon has not met its burden of showing good cause why it should not be required to produce the requested documents,’’ Vuono wrote.
  
  Mark P. Harmon, president of the firm, said he is considering what to do next. “We are disappointed with the Appeals Court decision on this important issue,” he said.
  
  Coakley’s office began looking at Harmon Law three years ago in an effort to determine whether the firm failed to comply with a new Massachusetts law protecting tenants living in foreclosed homes from being evicted without cause.
  
  Harmon said in legal briefs that it filed eviction notices for residents in properties seized by lenders before the law became effective.
  
  The state also is investigating whether Harmon Law disregarded a court order requiring it to notify the state before initiating foreclosures on homeowners with mortgages that originated with Fremont Investment & Loan, a California firm Coakley sued for predatory lending practices.
  
  Harmon, which also runs a title firm and auction company, has been the focus of criticism by some consumer advocates and foreclosure law specialists for violating homeowners’ rights so it could maximize profits.
  
  George E. Babcock, a Rhode Island attorney who specializes in foreclosure defense, said Harmon Law continues to improperly foreclose on borrowers, sometimes taking back properties without the proper documentation.
  
  Although foreclosure numbers have dropped this year, Babcock said many borrowers in lower-income communities still struggle to keep up with mortgages on homes they purchased at inflated prices.
  
  More than 1,200 Massachusetts homeowners lost their properties to foreclosure during the first five months of the year, a 69 percent decline compared with the same time last year, according to the Warren Group, a Boston company that tracks local real estate.
  
  Babcock said Harmon is still by far the largest foreclosure firm he encounters in his Rhode Island defense work. “They continue to run roughshod over the citizens of Rhode Island and the Commonwealth of Massachusetts,’’ he said.
  
  Harmon Law declined to comment on Babcock’s allegations.

Source: AG Martha Coakley gets OK to examine law firm (Alleges deception tied to foreclosures).

For the court ruling, see Harmon Law Offices, P.C. v. Attorney General, No. 12-P-407 (June 28, 2013).

(1) From the court's ruling:

• Acting pursuant to her authority under the Massachusetts consumer protection act, G.L. c. 93A (c. 93A or the statute), the Attorney General issued two civil investigative demands (CIDs or demands) to Harmon Law Offices, P.C. (Harmon), seeking information regarding its foreclosure and eviction practices.[1]
  
  Harmon challenged the demands and filed a complaint seeking relief under § 6(7) of the statute.[2] After a hearing, a judge of the Superior Court concluded that Harmon had not met its burden of showing good cause to set aside the CIDs and dismissed the complaint.
  
  Harmon appeals, claiming that the judge abused her discretion because the demands interfere with Harmon's attorney-client relationships, and the requested documents are protected by the litigation privilege.
  
  Harmon also contends that, by representing its clients in foreclosure and eviction proceedings, it is not engaged in trade or commerce and therefore cannot be subject to liability under c. 93A. Thus, Harmon maintains, the Attorney General exceeded her authority by requesting information directly from Harmon regarding possible violations of c. 93A.
  
  For substantially the reasons articulated by the Superior Court judge in her thorough memorandum of decision and order dismissing Harmon's complaint, we conclude that Harmon has not met its burden of showing good cause why it should not be required to produce the requested documents.
  
  Accordingly, we affirm.

Lower Court Order Upheld Prohibiting Option One/H&R Block Massachusetts Foreclosure Actions Without First Obtaining State AG Or Court Approval

From the Office of the Massachusetts Attorney General:

• The Massachusetts Appeals Court has affirmed a preliminary injunction obtained by Attorney General Martha Coakley’s Office against Option One Mortgage Corp. (“Option One”) and H&R Block Mortgage Corp. (“H&R Block Mortgage”), subprime lenders that originated thousands of loans in Massachusetts. The preliminary injunction, issued by then Judge Ralph D. Gants in Suffolk Superior Court last November, prohibited Option One and American Home Mortgage Servicing, Inc. (“AHMSI”) from initiating or advancing foreclosures on mortgage loans that the Court found to be “presumptively unfair.”(1) Under the order, which affects up to 9,700 Massachusetts loans originated by Option One, AHMSI must give the Attorney General’s Office advance notice before it intends to foreclose on any such loan, and if the Attorney General objects, obtain approval from the Court before foreclosing on a loan.

• In a summary order issued late last week, the Appeals Court affirmed the preliminary injunction. The Appeals Court cited the Supreme Judicial Court’s decision in Commonwealth v. Fremont Investment & Loan [452 Mass. 733; 897 N.E.2d 548; 2008 Mass. LEXIS 797 (2008)] and determined the Superior Court’s injunction was proper.

For the Massachusetts Attorney General press release, see Appeals Court Affirms Preliminary Injunction Against Option One and H&R Block Mortgage, Restricting Foreclosures on Unfair Subprime Loans.

For the 11/12/2008 Massachusetts AG press release on this matter, see Coakley Obtains Preliminary Injunction Against Option One and H&R Block, Accused of Deceptive and Discriminatory Lending Practices.

(1) Under the order, a loan is “presumptively unfair” if it possesses the following characteristics:

• The loan is an adjustable rate mortgage with an introductory period of three years or less;
• The borrower has a debt-to-income ratio (the ratio between the borrower’s monthly debt payments, including the monthly mortgage payment, and the borrower’s monthly income) that would have exceeded 50% if Option One had measured the debt, not by the debt due under the teaser rate, but by the debt due under the fully-indexed rate, except when the borrower had a student loan in which payment had been deferred at least six months from the date of submission of the mortgage loan application, in which case debt-to-income ratio need exceed only 45 percent;
• The loan has an introductory or “teaser” rate for the initial period that is at least 2 percent lower than the fully indexed rate, (unless the debt-to-income ratio is 55 percent or above, in which case the difference between the teaser rate and fully indexed rate is not relevant);
• The loan-to-value ratio of the loan is 97% or the loan carries a substantial prepayment penalty or a prepayment penalty that lasts beyond the introductory period.

1st Circuit Reinstates Loan Modification-Seeking Homeowner's Earlier-Dismissed Suit Accusing Servicer Of Unfair Debt Collection Practice By Jerking Her Around In Violation Of Bay State UDAP Statute; Bankster Faces Possible Triple Damages; Court: 'Absence Of Contractual Breach No Bar To Liability'

In Boston, Massachusetts, The National Law Journal reports:

• A federal appellate court ruled that Wells Fargo Bank must face a Massachusetts consumer protection law claim that entails possible triple damages, plus additional claims, for its conduct toward a homeowner under a federal loan modification program.
  
  A unanimous U.S. Court of Appeals for the First Circuit ruling in Young v. Wells Fargo Bank N.A. revived Susan Young's District of Massachusetts case.
  
  Young sued Wells Fargo and American Home Mortgage Servicing Inc., now part of Atlanta's Ocwen Financial Corp., after she tried to avail herself of protections under the Home Affordable Modification Program (HAMP). She tried to modify a $282,000 mortgage she obtained from Wells Fargo in 2006. American Home was the servicer.
  
  "This conduct dates back to August 2008, when defendants mistakenly posted a notice on her door stating that she was in arrears on her mortgage payments, and continued to supply her with misinformation about her obligations under the mortgage," Senior Judge Kermit Lipez wrote, joined by Judge Jeffrey Howard and Senior Judge Norman Stahl. The court released the opinion on Tuesday.
  
  "Defendants' handling of her loan modification process under [HAMP's trial period plan] was only the culmination of a prolonged period of unfair conduct," he continued.(1)

For more, see First Circuit Revives Claim for Faulty Foreclosure.

For the ruling, see Young v. Wells Fargo Bank N.A., No. 12-1405 (1st Cir. May 21, 2013)

(1) In this excerpt, the appeals court described the situations where the Massachusetts statute prohibiting unfair or deceptive acts or practices ("UDAP") applies:

• Young also pleads a claim under Mass. Gen. Laws ch. 93A, otherwise known as Chapter 93A. This statute "provides a cause of action for a plaintiff who 'has been injured,' by 'unfair or deceptive acts or practices.'" Rule v. Fort Dodge Animal Health, Inc., 607 F.3d 250, 253 (1st Cir. 2010) (quoting Mass. Gen. Laws -30-ch. 93A, §§ 2(a), 9(1)).
  
  The Massachusetts courts have explained that "[a] practice is unfair if it is within the penumbra of some common-law, statutory, or other established concept of unfairness; is immoral, unethical, oppressive, or unscrupulous; and causes substantial injury." Linkage Corp. v. Trs. of Boston Univ., 679 N.E.2d 191, 209 (Mass. 1997) (citation omitted) (internal quotation marks omitted) (modifications omitted).
  
  Violation of a statute is not a necessary element of a Chapter 93A claim, as the consumer protection law "creates new substantive rights and, in particular cases, makes conduct unlawful which was not unlawful under the common law or any prior statute." Commonwealth v. Fremont Inv. & Loan, 897 N.E.2d 548, 556 (Mass. 2008) (internal citation omitted) (quotation marks omitted).
  
  Nor is liability under Chapter 93A precluded by the absence of a contractual breach. See NASCO, Inc. v. Public Storage, Inc., 127 F.3d 148, 152 (1st Cir. 1997).

Fremont, Saxon Engaged In Unfair, Deceptive, Predatory Lending Practices, Says Martha's Vineyard Lawsuit

In Massachusetts, on the island of Martha's Vineyard, the Martha's Vineyard Gazette reports:

• The town of West Tisbury has filed a lawsuit against a mainland subprime mortgage company that loaned more than half a million dollars to an affordable homesite owner in town who had no ability to repay — and then foreclosed on the property. The lawsuit charges Saxon Mortgage Services Inc., a Texas-based lending institution, and Fremont Investment and Loan of southern California, with unfair, deceptive and predatory lending practices. Filed in Dukes County Superior Court on Dec. 20 by West Tisbury town counsel Ronald H. Rappaport, the complaint seeks to reestablish a set of protective covenants that run with the property to ensure that it will remain affordable in perpetuity.

For more, see Lawsuit Targets Subprime Bank.

Go here for a post on the Massachusetts Attorney General litigation against Fremont alleging predatory practices.

Mass. AG "Persuades" Subprime Lender To Stop Foreclosures For 90 Days

The Boston Herald reports:

• "Fremont Investment & Loan has agreed to stop foreclosure proceedings on all of its mortgages in Massachusetts for 90 days while [Massachusetts Attorney General Martha] Coakley’s office reviews the loans. If the attorney general’s office finds evidence of loans “tainted by unfair and deceptive lending practices,” it will then seek to block the California-based subprime lender from foreclosing on the mortgages in question. At that point, the AG’s office may seek a new payment plan for the homeowner or other relief."

Reportedly, as many as 2000 Massachusetts homeowners will be benefitting from this arrangement. For more, see A foreclosure truce: Fremont AG pact gets homeowners 90 days.

Massachusetts AG Initiates Probe Into F'closure Mill Suspected Of Possible Illegal Practices In Booting Tenants When Carrying Out F'closure Evictions

In Boston, Massachusetts, The Boston Globe reports:

• Harmon Law Offices, a Newton firm that specializes in foreclosures, is being investigated by the state attorney general’s office for allegedly unlawfully sending eviction notices to residents of bank-owned properties. State officials want to determine whether Harmon Law failed to comply with a new Massachusetts law that protects tenants living in foreclosed homes from eviction, a spokesman for Attorney General Martha Coakley said yesterday.

• Coakley said her office also is looking into allegations that Harmon Law disregarded a court order requiring it to notify the state before foreclosing on homes with mortgages originated by subprime lender Fremont Investment & Loan.

***

• Paul Collier, a Cambridge lawyer who represents many clients facing foreclosure, said a group of local lawyers has been monitoring the procedures Harmon Law uses to evict tenants living in foreclosed homes.

• The new state law is intended to keep tenants from being forced out of a property regardless of when a foreclosure occurred, Collier said. “The purpose of the provisions of this statute is to protect anyone who is still in their homes,’’ he said.

For the story, see AG seeks data on evictions (Newton law firm faces query over rules protecting tenants).

Nevada Lawsuit Alleges Lender Used Deceptive & Unfair Practices, Lacked Good Faith When Making Unsustainable Home Loans; Seeks Class Action Status

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

• The foreclosure crisis is far from over in southern Nevada. Now a group of homeowners are fighting back against one lender. They've filed a class action lawsuit to stop foreclosures and to get restitution for those who've already lost their homes. They are going after California's Indymac, one of the first banks to fail during the meltdown.

• The lawsuit claims the lender did not deal in good faith with their borrowers and used deceptive and unfair practices. "They focused in on minority groups and attempted to sell them on loans that they knew that those borrowers could never ever satisfy," said attorney Matthew Callister.(1) Callister is representing the lawsuit against Indymac, who was taken over by OneWest Bank. He says tens of thousands of valley homeowners have loans through the company and he wants to stop more from becoming victims of bad lending practices.

For more, see Las Vegas Attorney Files Class Action Against Home Lender.

For other posts on homeowners using state & federal consumer protection laws to stave off foreclosures, Go Here, Go Here, and Go Here.

(1) Last year, the Massachusetts Supreme Judicial Court ruled that the making of subprime loans that lenders either knew or should have known were unsustainable constituted unfair and deceptive business practices in violation of the applicable state consumer protection statute (M.G.L. c. 93A, §2). See:

• The National Law Journal: Mass. High Court Upholds Order Restricting Subprime Lender From Foreclosing,
• Court ruling: 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, try here). UndoMortgageLoans TILAdelta