New Suit for Coakley – AG Takes New Step Toward Fighting Foreclosure
As more and more politicians and government agencies begin to recognize and address the foreclosure blight affecting American homeowners, more questionable lending practices come to light. In the latest development, Massachusetts Attorney General Martha Coakley is suing Fremont on behalf of the many Massachusetts borrowers whose homes are now in foreclosure.
Fremont, known as both Fremont General and Fremont Investment and Loan, facilitated 15,000 home loans in Massachusetts in the past three years, according to the Boston Herald. Coakley reportedly believes the nature and terms of these loans added significantly to the state's foreclosure woes.
Sources reportedly indicate that Coakley's investigations into Fremont have revealed predatory lending practices, such as offering bonuses to brokers who negotiated high-cost loans, providing 100% financing to borrowers, neglecting to check borrower income levels, and generally valuing their own financial well-being over the interests of their clients.
Many Massachusetts borrowers are now left with ARMs that are resetting and becoming impossible to pay. A statement issued by Fremont notes that Coakley is accusing the company of "unfair and deceptive conduct," and will demand restitution to borrowers as well as civil penalties.
Despite recent legislation passed by Coakley outlawing predatory lending and the incentive-based programs allegedly used by Fremont, the company has noted that it considers the suit "without merit," and plans to defend itself "vigorously."
The company also stated in its press release that it planned to continue working with regulators nationwide to offer assistance to delinquent borrowers, and sees Coakley's decision to sue as "regrettable."
But the Massachusetts AG believes the loans were unnecessarily risky, and in violation of state law, according to reports from Boston.com. Sources estimate that 2,500 outstanding mortgages statewide are the result of Fremont loans.
This suit is the latest attack in Coakley's aggressive fight against foreclosure. Just last month, she made permanent legislation banning foreclosure rescue scams in the state. And she's not the only Attorney General taking action.
Similar suits have been brought by AGs in Ohio, Connecticut, and New York, and various anti-foreclosure and foreclosure-relief acts have been circulating through legislative bodies across the country.
According to reports, Coakley's suit will focus on the ways in which home loans are marketed and sold. This move falls in line with a trend of cracking down on creditors, demanding clearer borrower disclosure and less complication of the bottom line.
There is no one group or individual guilty for the current foreclosure crisis. Hopefully, though, with the collective efforts of individuals like Attorney General Coakley, significant changes will occur to make home-buying a better experience for everyone involved.