Coakley reaches settlement in subprime case

Massachusetts Attorney General Martha Coakley has entered into a settlement with Fremont Investment & Loan and its parent Fremont General Corp. to resolve a lawsuit about subprime loans, Coakley's office said.

"Fremont has agreed to pay the commonwealth $10 million in consumer relief, civil penalties, and costs," Coakley's office said in a press release. "Fremont has also agreed not to foreclose upon unfair loans without certain protections for borrowers or originate unfair loans in the commonwealth."

Attempts to reach Fremont for comment were not immediately succesful. According to the Associated Press, Fremont General filed for bankruptcy protection last year and is selling Fremont Investment & Loan's remaining assets.

(Coakley is seen at right in a Globe file photo taken by Globe staffer David L. Ryan.)

Earlier this year, a Dorchester mortgage broker who was the focus of a Coakley investigation pleaded guilty to helping unqualified home buyers to secure subprime loans, a Globe story reported. Coakley's investigation examined mortgage loans that the broker had helped applicants secure from California-based Freemont Investment & Loan.

A Globe story from 2008 noted that Fremont staffers had had a nickname for no-down-payment loans for subprime borrowers with low credit ratings: "pulse products."

"If a borrower had a pulse, he or she could qualify for one of Fremont's products," a former Fremont account executive said in an affidavit that was part of the lawsuit that Coakley brought against Fremont.