Freemont Sued for Predatory Lending

The Massachusetts attorney general’s office has sued Fremont Investment and Loan for predatory lending practices. The lawsuit, filed Thursday in Suffolk Superior Court, alleged Fremont paid rich commissions to a network of independent mortgage brokers who sold risky mortgages with high payments that borrowers could not afford, a violation of the state’s anti predatory lending law.

“There was no consideration of what’s in the consumers’ best interest,” Attorney General Martha Coakley said. Fremont “exemplified all of the worst practices we’ve seen by lenders that have resulted in foreclosures,” she said. The attorney general is seeking fines from Fremont for violating the state’s 2004 anti predatory lending law, which bars lenders from making loans that customers are unable to pay, as well as compensation for borrowers.

In a statement, Fremont General Corp., the Brea, Calif., parent company of Fremont Investment, said that it continues to work with regulators around the country to modify loans for customers struggling to make their payments. The company said it is “regrettable that the Massachusetts attorney general has abandoned these cooperative efforts to help borrowers keep their homes.”