The Department yesterday said had reached settlements with Litchfield Financial Corp., and Developer Finance Corp., two Massachusetts-based lenders that financed developers accused of scamming more than a 1,000 people nationwide, primarily senior citizens, in fraudulent land sales.
The lenders agreed to offer various options expected to save borrowers as much $38 million.
Litchfield, a subsidiary of Textron, Inc., has agreed to offer three options to more than 600 defrauded consumers still making payments to Litchfield. The borrowers can transfer their lots to Litchfield to satisfy their debt; continue their payments with a reduction in their loan balances; or, continue their payments with a smaller reduction in their balances, plus a cash payment. In addition, Litchfield will offer $3,000 to nearly 200 families who refinanced or otherwise paid off their loan balances with the company.
Developer Finance Corp., has agreed to offer nearly 250 purchasers the option of transferring their lots back to DFC to satisfy their debt.
For more information about the agreements go to the HUD website.