Massachusetts Attorney General Settles with Lender for $10 Million

On June 9, Massachusetts Attorney General Martha Coakley announced a $10 million settlement agreement with Fremont Investment & Loan and its parent Fremont General Corporation (Fremont) to resolve a lawsuit against the lender. The lawsuit, first filed in 2007, alleged that Fremont engaged in unfair and deceptive loan origination and sales conduct, and that it made risky loans that it knew were designed to fail. As part of the settlement, Fremont agreed not to foreclose upon loans deemed “unfair” without certain protections for borrowers and not to originate “unfair” loans in Massachusetts. The settlement makes permanent the protections against foreclosure of “presumptively unfair” loans, which Massachusetts courts had previously enforced against Fremont (reported in Special Alert Mass Supreme Court Upholds Fremont Preliminary Injunction).