Massachusetts Attorney General Martha Coakley
Massachusetts Attorney General Martha Coakley

Massachusetts Attorney General Martha Coakley has filed a lawsuit against the Federal Housing Finance Agency (FHFA) and mortgage lenders Fannie Mae and Freddie Mac, claiming they have violated the state’s 2012 foreclosure prevention law.

The lawsuit, filed in Suffolk Superior Court, alleges that Fannie Mae and Freddie Mac, which are under FHFA conservatorship, refuse to comply with the August 2012 Massachusetts law “An Act to Prevent Unnecessary and Unreasonable Foreclosures.”

The law, passed by the Massachusetts Legislature in response to the foreclosure crisis, prohibits creditors from blocking home sales to non-profits because the non-profit intends to resell the property back to the former homeowner. According to the AG’s office, Fannie Mae and Freddie Mac have continued to block buybacks even though they lose money in the process.

“It makes no sense for our federal government to stand in the way of this work to help struggling families stay in their homes, and it is illegal for Fannie and Freddie to do this in Massachusetts,” Coakley said in a statement. “For too long, Fannie and Freddie have been roadblocks to progress in addressing this foreclosure crisis, and I urge them to immediately reverse their policy on this common-sense program.”

A current gubernatorial candidate, Coakley was the first woman elected as attorney general in Massachusetts in 2006 and was reelected four years later. Prior to serving as attorney general, Coakley spent eight years as Middlesex district attorney. According to her campaign website, Coakley was part of the first female class to attend Williams College and received her J.D. from the Boston University School of Law.