The fresh courtroom reasoned one Fremont just like the a lender need recognized one to money for the very first around three qualities merely revealed was "destined so you can foreclosures" unless new borrower

you'll refinance the borrowed funds at otherwise nearby the end of the introductory price months, acquire in the process a special and you may reduced introductory price. [Note 14] Brand new fourth foundation, not, will make they fundamentally hopeless to possess subprime individuals to re-finance until construction prices increased, because if houses cost stayed steady or denied, a debtor that have a mortgage which have a loan-to-worthy of ratio of a single hundred or so % otherwise a hefty prepayment penalty was not planning feel the needed collateral or financial capability to get an alternative loan. The brand new judge reported that, "[g]iven the latest action from the housing industry together with intrinsic uncertainties on what one sector tend to vary over the years . . . its unjust for a loan provider to issue a home mortgage financing safeguarded from the borrower's dominant house your bank fairly needs commonly get into default because basic period finishes except if the latest reasonable market price of the home has grown at the personal of your basic months. "

The judge concluded that the balance regarding harms recommended granting the brand new initial injunction, and that people interest could well be made by doing this. Brand new injunction the guy granted need Fremont to accomplish another: (1) to offer progress notice with the Attorneys Standard of the intent so you're able to foreclose for the any one of the real estate loan loans; and you will (2) regarding finance one to possess each one of the four functions off unfair money only revealed and this is shielded because of the borrower's principal hold (known in the injunction because "presumptively unfair" loans), to utilize the new Attorneys General so you're able to "resolve" its distinctions regarding foreclosures -- allegedly through a good reconstitute otherwise exercise of one's financing.