March 20, 2007
Massachusetts Attorney General Martha Coakley says her office is moving ahead on several predatory lending cases in the state that are tied to subprime mortgages.
Coakley says the cases began before the industry went into its well publicized tail spin, and stem from complaints from mostly low-income and minority borrowers. She did not disclose the companies currently under investigation.
"I will continue to use our resources to enforce Massachusetts laws prohibiting unfair, deceptive, and otherwise unlawful lending, foreclosure practices and related activities," Coakley said. "In addition, it is clear that more effective oversight and regulation is necessary in the mortgage lending marketplace."
Coakley said her office is considering stronger regulations in several areas, including regulations to:
• protect borrowers' interests in a mortgage lending transaction;
• require meaningful underwriting standards by lenders, to help ensure that loans can actually be repaid by borrowers;
• address fraudulent activity that we have found in the course of our enforcement actions, such as when loan originators inflate consumers' income, obtain inflated appraisals or make other misrepresentations; and
• prohibit foreclosure "rescue" schemes in which people typically lose their homes, and the equity in their homes, while receiving no benefit.
"I look forward to working with state and federal officials and others to ensure that all Massachusetts residents have honest and fair access to credit and the ability to protect and their most valuable real estate assets," Coakley said.
