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BOSTON —� Massachusetts Attorney General Martha Coakley obtained a preliminary injunction barring mortgage company Fremont Investment & Loan from starting or proceeding on foreclosures or loans that are “presumptively unfair.” In Feb. 25 injunction, Associate Justice Ralph D. Gants wrote that a loan is “presumptively unfair” if it meets four conditions: • an adjustable rate mortgage with an introductory period of three years or less; • an introductory interest rate at least 3% lower than the fully-indexed rate, or relevant index at the time the loan began plus the margin in the mortgage note; • the borrower’s debt-to-income ratio exceeded 50% when calculating debt using the fully-indexed rate; and • Fremont gave 100% financing, a significant prepayment penalty or a penalty extending beyond the introductory period. Commonwealth of Massachusetts v. Fremont Investment & Loan, No. SUCV2007-04373 (Suffolk Co., Mass., Super Ct.) Gants also outlined stringent and detailed criteria that Fremont Investment, a subsidiary of Santa Monica, Calif.-based Fremont General Corp., must adhere to make or continue loans and foreclosures, including giving 30 days notice of foreclosures to the attorney general’ office. Coakley’s press release referred to Fremont Investment as a subprime lender “whose risky loan-selling conduct significantly contributed to the foreclosure crisis in Massachusetts.” “This decision shows again that in many cases, irresponsible and unlawful lending practices caused this foreclosure crisis,” said Coakley. “We intend to hold accountable those who allegedly engage in unlawful lending conduct.” Fremont and the company’s attorney on the case, James R. Carroll, a Boston litigator for New York’s at New York’s Skadden, Arps, Slate, Meagher & Flom could not immediately be reached for comment.

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