Massachusetts Attorney General Enters Into Agreement With Fremont To Provide Foreclosure Relief

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July 11, 2007 -- BOSTON – Massachusetts Attorney General Martha Coakley has entered into a preliminary agreement with Fremont Investment & Loan ("Fremont"), a subprime lender that originated thousands of loans in Massachusetts. Under the agreement, Fremont will cease foreclosures on loans it originated in the state in order to provide the Attorney General a 90-day review period. During that time, the Attorney General's Office may object to any foreclosure that it determines may be tainted by unfair or deceptive lending practices. Fremont will pay the costs of the loan review process under the terms of the agreement.

"We appreciate Fremont's cooperation at this stage as we work to address serious concerns about the company's past subprime lending activities," said Attorney General Martha Coakley. "This agreement is an important step in providing immediate assistance to distressed borrowers and it will stop the foreclosure process until a determination has been made on whether the borrower may be entitled to financial relief."

Fremont has agreed to immediately stop foreclosures on over 2,000 Massachusetts loans that the company services. No foreclosures can occur until the Attorney General's Office has been provided with documentation for each delinquent loan and a 90-day period to review each transaction. The company must also provide files on the 290 Massachusetts loans that it currently owns but has contracted to sell. Those loans may not be transferred until the Attorney General has been given a 45-day period to review the files.

Under the agreement, the Attorney General's Office may object to a foreclosure or transfer of loans if it believes Fremont's lending or foreclosure practices violated consumer protection laws. If the Attorney General objects, a potential payment plan or other relief with respect to the loan will be requested.

Several weeks ago, the Attorney General's Office notified Fremont of its intent to bring an enforcement action if it failed to address concerns that its lending practices violated Massachusetts' Consumer Protection Act. Instead of proceeding immediately to court, this preliminary agreement addresses the issue of stopping foreclosures while an inquiry continues. The agreement does not resolve potential claims that the Attorney General may assert against the lender in the future.

This enforcement initiative is part of Attorney General Martha Coakley's multifaceted initiative to combat predatory lending in Massachusetts. Emergency consumer protection regulations were issued banning foreclosure rescue schemes, and comments were solicited regarding potential amendments to further regulations governing mortgage brokers and lenders. The Office is now considering the written comments from various industry associations and housing advocates about those potential regulations. Additionally, the Office along with the Boston Bar Association and National Consumer Law Center led a two-day training for pro bono lawyers willing to assist homeowners facing foreclosure. The Attorney General’s Office continues to litigate several enforcement actions against fraudulent lending and foreclosure rescue schemes.

Source: Massachusetts Attorney General