Legal Resources and Key Court Decisions

Legal Resources 

Pro Bono Foreclosure Assistance Hotline

Individuals facing foreclosure may benefit from qualified legal counsel to represent them in foreclosure proceedings. The Attorney General's Office, in partnership with several bar associations, legal services organizations and advocacy groups, announced the establishment of a Pro Bono Foreclosure Assistance Hotline.  Low-income Massachusetts residents who are facing foreclosure may call (800) 342-5297 or (617) 603-1700 and leave a message in the foreclosure assistance mail box. Income limits apply.

REBA and CHAPA September 2009 Forum

The Real Estate Bar Association's Affordable Housing Committee and CHAPA's Massachusetts Foreclosed Property Initiative organized a forum to discuss the impact of recent legislation and court decisions on foreclosure practice and the rights of owners and tenants in the foreclosure process. The forum's guest speakers included Judith Liben, Senior Housing Attorney at the Massachusetts Law Reform Institute in Boston, and Kurt James, a Director at Rackemann, Sawyer & Brewster, P.C. Below are the powerpoint presentations from the forum.

REBA Protecting Tenants at Foreclosure Act of 2009

Foreclosure Procedures in Massachusetts Post Ibanez 

Key Court Decisions 

The Attorney General's Office is investigating and taking enforcement actions against those who used foreclosure rescue schemes and unfair or deceptive practices in Massachusetts.  These actions may seek civil penalties, restitution and injunctions.

Fremont Investment and Loan 

The Attorney General's Office filed suit on October 5, 2007, in Suffolk Superior Court against Fremont and its parent company, Fremont General Corporation based on the defendant's unfair and deceptive loan origination and sales conduct.  The complaint specifically alleges that the company was selling risky loan products that it knew was designed to fail, such as 100% financing loans and "no documentation" loans.  The AG's Office obtained a preliminary injunction in Suffolk Superior Court in a case against Fremont General and Fremont Investment and Loan in February 2008. The order prohibits Fremont from initiating or advancing foreclosures on loans that are "presumptively unfair."

Under the terms of the injunction, Fremont must provide the AG's Office with at least a 30-day notice of all foreclosures it intends to initiate for the approximately 2,200 loans that Fremont still owns and services, and allow the Attorney General an opportunity to object to the foreclosure going forward.  If Fremont has issued a loan that is considered "presumptively unfair," and the borrower occupies the property as his or her principal dwelling, the Attorney General has 45-days to object to the foreclosure.

On March 31, 2008 the Attorney General's office obtained an expanded preliminary injunction order against Fremont Investment & Loan. This expanded preliminary injunction prohibits Fremont from assigning or selling Massachusetts loans owned by Fremont, or the servicing obligations on those loans, unless the buyer agrees in writing to be bound by the obligations set forth in the Court's Preliminary Injunction issued February 25, 2008. 

The AG's Office has encouraged homeowners with mortgages from Fremont to contact their office.

Option One and H&R Block

On June 3, 2008 the Attorney General's Office filed a lawsuit in Suffolk Superior Court against Option One Mortgage Corp., a subprime lender that originated thousands of loans in Massachusetts, and its parent company, H&R Block, Inc.  The complaint alleges that Option One and H&R Block engaged in unfair and deceptive conduct on a broad scale by selling extremely risky loan products that the companies knew or should have known were destined to fail to Massachusetts consumers.  The complaint also alleges that the companies discriminated against black and Latino borrowers in Massachusetts by charging them higher points and fees to close their loans than similarly situated white borrowers and by targeting black and Latino consumers with marketing that pushed the sale of predatory loan products.

The complaint alleges that Option One and H&R Block's conduct in selling and servicing mortgage loans has significantly contributed to the foreclosure crisis in Massachusetts.  The Attorney General's Office alleges that Option One and H&R Block marketed loan products to Massachusetts borrowers with a variety of risky features, which combined to pose an exceedingly high possibility that the loans would result in foreclosure.  

Option One no longer issues mortgages for residential properties in Massachusetts.  It  continued to service thousands of mortgage loans held by Massachusetts homeowners, until last month, when  the rights to service those loans were purchased by American Home Mortgage Servicing, Inc., of Irving, Texas, which was also named as a defendant in the complaint,

According to the complaint, Option One and H&R Block were engaged in other unlawful practices in servicing the loans, such as failing to credit borrowers for payments, demanding excessive fees to avoid foreclosure, and pressuring borrowers who were delinquent to enter into unfair "Forbearance Agreements," which would allow the lender to foreclose if the borrower missed a payment by even one day.

The Attorney General's Office is seeking a Preliminary Injunction to restrict Option One's ability to foreclose on Massachusetts borrowers and anticipates a hearing to be scheduled on the court order in the near future.  The Attorney General's Office is seeking civil penalties, restitution and an injunction, which would prohibit Option One and American Home Mortgage, the current servicer of most loans originated by Option One, from selling or transferring any Massachusetts mortgages and from foreclosing on any Massachusetts loan without giving the Attorney General's Office a 90-day opportunity to review the loan transaction and object to the foreclosure.

The Attorney General's Office has also asked the court to order the defendants to modify existing loans to remedy the unfair and deceptive origination conduct by Option One.  Additionally, the Attorney General's Office has asked the court to enter an order preventing Option One and the other defendants from any further discrimination in mortgage lending, requiring them to provide fair lending training to employees, and test and report on any racial disparities in lending-related activity.

More information about the Fremont and Option One cases and information about all of enforcement actions taken by the AG's Office are available on the AG's website at under "Press Releases".