While Congress debates a remedy for the subprime loan crisis, state officials are calling for tighter controls on lenders.
Massachusetts Attorney General Martha Coakley says more effective oversight and regulation is necessary to mitigate the mortgage fraud epidemic in Massachusetts and to prevent future crises.
Coakley's Office has expressed alarm as the crisis in the subprime lending industry escalates, and as the number of foreclosures continues to rise in Massachusetts and nationwide. Coakley says several law enforcement actions against predatory lending participants are pending in her office; the office will continue to review the situation for other appropriate enforcement actions.
"As I testified last month, our ability to pursue criminal prosecutions of mortgage fraud is hampered by the existing statute," Coakley said. "We are exploring stronger regulations in several areas, including addressing fraudulent activity that we have found in the course of our enforcement actions."
In her testimony on March 27, 2007, Coakley recommended an approach to ending predatory lending practices and helping consumers facing possible foreclosure:
• Bring civil cases to recover money and curtail illegal lending practices
• Addition of the larceny by false pretense statute which would cover any mortgage lender and increase penalties.
• Fund Counseling and Loan Programs
• Licensing of and Standards for All Loan Originators
"We look forward to continuing our work with the Governor and the legislature to ensure that all Massachusetts residents are protected from disreputable mortgage brokers and lenders," said Coakley.