Massachusetts leader takes on predatory lending and foreclosures

Massachusetts Attorney General Martha Coakley has become involved in an area of real estate more typically reserved for real estate attorneys: foreclosure sales.

Specifically, Coakley brought lawsuits against two federal mortgage agencies — Freddie Mac and Fannie Mae — for their alleged refusal to sell homes in foreclosure to various nonprofit groups committed to helping struggling homeowners buy back their properties. Notably, those two lenders hold or guarantee over 60 percent of Americans’ home mortgages.

The lawsuit has sparked commentary on the existing procedures that mortgage lenders must follow before foreclosing on a property with a delinquent mortgage. For example, some consumer advocates may regard existing laws as permitting predatory lending.

The lawsuit is an important reminder that there may be mortgage buyback programs available to homeowners in trouble or facing foreclosure. Two local nonprofit organizations dedicated to returning distressed properties to their original owners include the Coalition for Occupied Homes in Foreclosure and Boston Community Capital. However, many mortgage documents are complicated to understand. With the help of a real estate attorney, a homeowner might better understand all available options against foreclosure.

An attorney can also be a strong advocate in negotiating with banks or loan underwriters. If an owner is deemed a poor credit risk, the negotiation skills of an experienced attorney may be desperately needed. In fact, an attorney that focuses on real estate law can provide assistance to clients at every stage of a real estate transaction. That process can be extenuated, involving lengthy purchase or lending agreements. Yet an existing or prospective homeowner does have certain protections, and an attorney can work to ensure that those rights are preserved.

Source: Boston Globe, “Coakley lawsuit has ties to key backer’s interests,” Andrea Estes, Oct. 16, 2014