COMMONWEALTH vs. FREMONT INVESTMENT &LOAN & another.
452 Mass. 733October 8, 2008 - December 9, 2008Suffolk County Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA,COWIN, CORDY, & BOTSFORD, JJ.
Practice, Civil, Preliminary injunction, Consumer protection case. Attorney General. ConsumerProtection Act, Unfair act or practice. Massachusetts Predatory Home Loan Practices Act. Words,"Unfair."In a consumer protection enforcement action brought by the Commonwealth against an industrialbank (defendant), claiming that the defendant had violated G. L. c. 93A in originating and servicingcertain "subprime" mortgage loans, the trial judge, in granting a preliminary injunction in favor of theCommonwealth that restricted the defendant's ability to foreclose on loans with features that thejudge described as "presumptively unfair," did not apply new rules or standards for defining whatwas "unfair" in a retroactive or ex post facto fashion, where the defendant's actions, in originatingloans with terms that would lead predictably to the consequence of the borrowers' default andforeclosure, were within established concepts of unfairness at the time the loans were made [742-748]; similarly, the defendant failed to demonstrate that the preliminary injunction created anenvironment of uncertainty that would result in unwillingness on the part of lenders to extend credit,where the injunction was based on established concepts of fairness and restricted, but did notremove, the defendant's ability to foreclose where those loan terms deemed unfair [751-752].In a consumer protection enforcement action brought by the Commonwealth against an industrialbank (defendant), claiming that the defendant had violated G. L. c. 93A in originating and servicingcertain "subprime" mortgage loans, the trial judge, in concluding that the Commonwealth was likelyto prevail on the merits of its claim, appropriately applied the provisions of G. L. c. 183C, theMassachusetts Predatory Home Loan Practices Act, to the defendant's loans, where the conductprohibited by that act was similar to the central element of the unfairness that judge found in the
defendant's lending practices (namely, the origination of a home mortgage loan that the lendershould have recognized at the outset the borrower was not likely to be able to repay) [748-749];further, there was no merit to the defendant's claims that its actions were permitted by the law as itsexisted at the time it originated its loans and that the Commonwealth's action was therefore barredby G. L. c.93A, § 3 [749-751].CIVIL ACTION commenced in the Superior Court Department on October 4, 2007.