Mass AG sues major subprime lender

Massachusetts Attorney General Martha Coakley this morning announced that her office has filed suit against Fremont Investment & Loan, a California company that was one of the state's largest subprime lenders.

Coakley charged Fremont with "engaging in predatory lending in Massachusetts" by taking advantage of borrowers through a broker-fueled system that compensated them with commissions but left their customers with mortgages they could not afford to pay.

A Fremont spokesman said a response was not immediately available.

The attorney general is seeking civil penalties and restitution to borrowers.

"Fremont issued thousands of subprime loans, with multiple layers of risk, through mortgage brokers who regularly provided Fremont with false information that Fremont intentionally, recklessly or negligently failed to verify or audit," said the suit, filed in Suffolk Superior Court.