Subprime Practice Group Advisory: Another Subprime Lender Enjoined from Foreclosing on Mortgage Collateral

more+
less-

The Massachusetts Attorney General is two for two. In a decision rendered on November 10, 2008, a Massachusetts Superior Court judge enjoined subprime lenders H&R Block Mortgage Corp. and Option One Mortgage Corp. (collectively the “Defendants”) from foreclosing on any of their mortgage loans with Massachusetts subprime borrowers without the express prior approval of the Attorney General (Commonwealth of Massachusetts v. H&R Block, Inc., Block Financial Corp., Option One Mortgage Corp., H&R Block Mortgage Corp., AH Mortgage Acquisition Co., d/b/a American Home Mortgage Servicing Inc. (“H&R Mortgage”)1).

Relying substantially on its findings in the 2007 Fremont case,2 the court found that the Defendants, through their issuance of subprime loans to Massachusetts borrowers, violated:

M.G.L. c. 93A, § 2 by engaging in “unfair and deceptive acts and practices”; and M.G.L. c. 151B, § 4(3B) by discriminating against black and Latino borrowers.

The Defendants have been enjoined from foreclosing on any property secured by a Massachusetts loan whether or not it is considered presumptively unfair (discussed below) without first giving the Attorney General at least 30 days advanced written notice to examine the loan documentation. If the mortgages are deemed “presumptively unfair,” the Defendants may not foreclose without giving the Attorney General at least 45 days advanced written notice. If the Attorney General’s office objects, the parties have 15 additional days to resolve their differences regarding the proposed foreclosure. If they cannot reach a mutually agreeable resolution in that time period, then the Defendants may only proceed with a foreclosure if they receive court approval.

Please see full advisory for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Mintz Levin - Public Finance Matters | Attorney Advertising

Written by:

more+
less-

Mintz Levin - Public Finance Matters on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×