Has the Massachusetts Supreme Judicial Court (SJC) blazed a path which puts consumers ahead of banks and lenders? In a unanimous decision, the SJC upheld a Superior Court’s order barring a subprime lender from foreclosing on any structurally unfair loan without court approval. The Court’s logic relies on the Consumer Protection Law and alleges subprime lenders originated loans “without meaningful regard for a borrower’s ability to repay” and thus engaged in unfair or deceptive conduct.
In a press release dated December 9th, 2008, Massachusett’s Attorney General Martha Coakley commits to seeking for borrowers facing foreclosure “significant relief” from lenders who issued loans that “predictably lead to foreclosure”. Further, the injunction initially obtained on February 25, 2008 requires the lender to work with the Attorney General’s Office to “modify or restructure” any loan deemed “presumptively unfair”.
Looks like Massachusetts may be the first in the nation to call to task lenders who sold risky loan products they reasonably should have known were unaffordable for borrowers. For borrowers who may be seeking protection under this breaking ruling, please visit Attorney General Martha Coakley's Foreclosure and Mortgage Lending website.
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