California investment firm cuts deals for subprime mortgages

An investment firm in California are slashing interest rates and forgetting about legal fees, past due rent and thousands of dollars in late charges. 200 homeowner’s subprime mortgages in Massachusetts will benefit from the change.

Attorney general, Martha Coakley, said yesterday whilst unveiling a deal with WMD Capital Markets LLC, “Just shows you what can be done, the banking industry looks beyond just saying: ‘Let’s foreclose.”

Recently, Fremont Investment & loans, a lender knows for aggressively pushing subprime mortgage during the housing boom was brought out by WMD, and Coakley sued Freemont last year, and won an injunction that limited the firm’s right to foreclose on its 2,200 Massachusetts customers.
Freemont recently sold 490 of its Bay State Loans, 200 they sold to WMD and the other 290 to Carrington Mortgage Services.

At injunction had been extended against Fremont to loans that Carrington bought, through A Suffolk Superior Court. The deal yesterday releases the mortgages WMD purchases from the court order.
WMD agreed in exchange to decrease the interest rates for the borrowers levels back to the 5 percent to 8 percent “teaser” rates that the loans originally carried. In the last 12 months rates had shot up to in some cases 12 percent.

They have waivered about $7,000 to $10,000 per mortgage of loan-origination charges, late fees, past-due interest and foreclosure-related legal expenses. Plus for their clients who cannot afford the lower-cost loans, they have agreed to pay them $10,000 to $25,000 to help them relocate someone else as long as they moved out quietly.

Source: Bostonherald

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