Judge expands injunction against Fremont

A state court barred Fremont Investment & Loan from selling some subprime mortgages in its existing loan portfolio or transferring the right to service loans, as part of the Massachusetts Attorney General's lawsuit against the California lender.

The attorney general's office today announced the decision, which was granted yesterday by Suffolk Superior Court Justice Ralph Gants.

Attorney General Martha Coakley (right) in October sued Fremont, alleging it engaged in predatory lending and deceptive sales practices when it sold subprime mortgages statewide.

In February, Gants issued a preliminary injunction barring Fremont from proceeding with foreclosures in the state.

Coakley's office filed a request for an emergency expansion of that preliminary injunction after Fremont said it would sell servicing rights for 290 Massachusetts mortgages to Carrington Mortgage Services, the state said.

The court permitted the Carrington deal to proceed but said no other sales were permitted; Carrington and the attorney general agreed that Carrington would give the state 45 days' notice of foreclosures on Massachusetts loans.

"Lenders cannot escape responsibility for their illegal conduct," Coakley said in a statement, "simply by selling off their loans or servicing rights."

Fremont's attorney in Boston did not immediately return a call for comment.
(By Kimberly Blanton, Globe staff)