Mortgage firms settle foreclosure "rescue" case

Massachusetts has reached a settlement with 10 mortgage firms over so-called home foreclosure "rescues" that authorities say were fraudulent.

Attorney General Martha Coakley (right) says a federal bankruptcy court has approved the agreement with the companies that funded or serviced mortgage loans for transactions arranged by Brockton attorney Alec Sohmer.

Coakley alleges Sohmer misled 26 homeowners who faced foreclosure and agreed to transfer ownership of their homes to him. Their hope was that they could later reclaim their properties through refinancing.

Coakley filed a complaint against Sohmer, who sought bankruptcy protection for himself in an ongoing case.

Under the settlement, the mortgage firms have agreed to provide $1.8 million in reduced mortgage obligations to owners of the 26 properties. (AP)