MA Attorney General Obtains Preliminary Injunction Against Subprime Lenders

Posted by Orb Staff on November 14, 2008 No Comments
Categories : Residential Mortgage

The office of Massachusetts Attorney General Martha Coakley has obtained a preliminary injunction against Option One Mortgage Corp. and H&R Block Mortgage Corp., subprime lenders that originated thousands of loans in Massachusetts.

The order, granted Monday by Judge Ralph D. Gants in Suffolk Superior Court, prohibits Option One and American Home Mortgage Servicing Inc. (AHMS) – which currently services 9,700 active Massachusetts Option One loans – from initiating or advancing foreclosures on mortgage loans that are considered ‘presumptively unfair’ under the court order.

Under the order, AHMS must give the attorney general's office at least 30 days' notice before it intends to foreclose on any such loan, and if the attorney general objects, the company must obtain approval from the court before foreclosing on a loan.

In addition, if mortgages meet certain characteristics that make them ‘presumptively unfair,’ Option One must direct AHMS not to foreclose upon such loans without giving the attorney general's office 45 days to object. During that time, the attorney general's office can object to the foreclosure going forward if it is determined that the loans were so risky as to be unfair, or were originated using unfair or deceptive acts or practices.

Source: Office Of Massachusetts Attorney General Martha Coakley

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