Litton Loan Servicing and Massachusetts Attorney General Martha Coakley have reached an agreement over loss mitigation actions that are pegged to help 1,100 borrowers with loans originated by Fremont Investment & Loan.
The loans – the subject of Coakley's recently settled enforcement action against Fremont alleging predatory lending practices – have been serviced by Houston-based Litton since the company acquired certain mortgage servicing rights from Fremont in June 2008.
As owner of the servicing rights, Litton became subject to certain obligations under a preliminary injunction issued by the Suffolk Superior Court against Fremont in March 2008. That injunction was upheld by the Supreme Judicial Court in December 2008, and became a permanent injunction in June 2009 under a consent judgment entered against Fremont.
Litton is expected to modify loans for eligible borrowers pursuant to the Home Affordable Modification Program (HAMP) and work out foreclosure alternatives (e.g., short sales, deeds-in-lieu, cash for keys) for delinquent borrowers who don't qualify for HAMP.
The agreement between Litton and Coakley additionally provides opportunities for Coakley's office to object to foreclosures and denials of loan modifications. Litton is required to obtain court approval to foreclose upon a loan where Coakley's office and Litton cannot resolve an objection.
Litton must also hold sessions in Massachusetts during the next month to foster borrower contact and promote loan modifications.