Judge Rules Subprime Loans Violate MA Law
A Massachusetts Superior Court judge has ruled that some kinds of mortgages violate the Commonwealth's consumer protection law, a ruling that will slow foreclosures in the state, the Boston Herald reported February 27, 2008.
“'It is both imprudent and unfair to approve mortgage loans that the borrowers cannot reasonably be expected to repay if housing prices were to fall,' Judge Ralph Gants wrote in a preliminary injunction against subprime-lending giant Fremont Investment & Loan."
Attorney General Martha Coakley brought the suit against Freemont, and Judge Gants ordered Fremont to give the state up to 90 days to review and attempt to resolve individual potential foreclosure cases.
California-based Fremont covers about 2,200 Massachusetts mortgages the firm issued or manages for third-party investors.
"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."
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