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AG Martha Coakley gets OK to examine law firm

Alleges deception tied to foreclosures

Massachusetts Attorney General Martha Coakley on Monday applauded a state Appeals Court decision that gave her permission — once again — to investigate a Newton law firm specializing in home foreclosures.

The recent unanimous court ruling affirmed a 2011 Suffolk Superior Court decision allowing Coakley’s office to continue examining Harmon Law Offices for alleged “unfair and deceptive acts” related to the firm’s foreclosure and eviction work.

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“This strong ruling upholds this office’s investigatory power,’’ Coakley said in a statement. “Harmon Law Offices had a vital obligation to follow Massachusetts law and court orders. Our office will continue to fully investigate this case and take action if appropriate.”

The decision is the latest development in a long-simmering dispute between the state and Harmon, one of the largest law firms specializing in foreclosures in Massachusetts. In 2010, Harmon Law sought court protection to stop or modify the attorney general’s efforts to seek certain legal documents. Among other issues, Harmon argued the demand interfered with attorney-client privilege and that it was the conduct of the firm’s clients, not its attorneys, that was in question.

Associate Justice Ariane D. Vuono, who wrote the five-page decision made by a three-member panel, said the lower court judge’s ruling in favor of the state was sound.

“Harmon has not met its burden of showing good cause why it should not be required to produce the requested documents,’’ Vuono wrote.

Mark P. Harmon, president of the firm, said he is considering what to do next. “We are disappointed with the Appeals Court decision on this important issue,” he said.

‘We are disappointed with the Appeals Court decision on this important issue.’

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Coakley’s office began looking at Harmon Law three years ago in an effort to determine whether the firm failed to comply with a new Massachusetts law protecting tenants living in foreclosed homes from being evicted without cause.

Harmon said in legal briefs that it filed eviction notices for residents in properties seized by lenders before the law became effective.

The state also is investigating whether Harmon Law disregarded a court order requiring it to notify the state before initiating foreclosures on homeowners with mortgages that originated with Fremont Investment & Loan, a California firm Coakley sued for predatory lending practices.

Harmon, which also runs a title firm and auction company, has been the focus of criticism by some consumer advocates and foreclosure law specialists for violating homeowners’ rights so it could maximize profits.

George E. Babcock, a Rhode Island attorney who specializes in foreclosure defense, said Harmon Law continues to improperly foreclose on borrowers, sometimes taking back properties without the proper documentation.

Although foreclosure numbers have dropped this year, Babcock said many borrowers in lower-income communities still struggle to keep up with mortgages on homes they purchased at inflated prices.

More than 1,200 Massachusetts homeowners lost their properties to foreclosure during the first five months of the year, a 69 percent decline compared with the same time last year, according to the Warren Group, a Boston company that tracks local real estate.

Babcock said Harmon is still by far the largest foreclosure firm he encounters in his Rhode Island defense work. “They continue to run roughshod over the citizens of Rhode Island and the Commonwealth of Massachusetts,’’ he said.

Harmon Law declined to comment on Babcock’s allegations.

Jenifer B. McKim can be reached at jmckim@globe.com. Follow her on Twitter @jbmckim.
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