Property Law Developments—Joseph William Singer

In Commonwealth v. Fremont Investment & Loan, 897 N.E.2d 548 (Mass. 2008), the highest state court in Massachusetts allowed the Attorney General to move forward on a claim that adjustable rate mortgages violated the state consumer protection act as “unfair or deceptive” practices when the borrowers’ incomes were not high even to allow them to afford to pay the higher interest rates. Granting mortgages on the assumption that the borrower would refinance at that point or the lender would foreclose assumed that the lender was entitled to base the security for the loan on the projected increase in market value of the collateral rather than the borrower’s ability to pay. The court allowed the claim to go forward even though the loans at issue did not constitute predatory loans as defined by state law.