Attorney General Scott Pruitt Announces Oklahoma Mortgage
Settlement with National Servicers
Oklahoma homeowners to receive relief for unfair practices
OKLAHOMA CITY – Oklahoma Attorney General Scott Pruitt announced Thursday that Oklahoma had reached an independent mortgage settlement with five national service providers, guaranteeing relief for many Oklahoma homeowners who were victimized by unlawful and unfair practices. Oklahoma did not sign-on to a national settlement that the president used to restructure the mortgage industry.
“Oklahoma is fortunate to have a stronger housing market and economy than many other states that are struggling. This settlement will provide damages to those Oklahomans who did fall victim to unfair and unlawful misconduct of mortgage servicing companies, while not exceeding the appropriate role and authority of state attorneys general,” Pruitt said.
Pruitt said the Oklahoma settlement requires five servicers – Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC – to pay Oklahoma a total of $18.6 million in compensatory damages to resolve claims of unfair and unlawful practices. The amount was determined by the multistate executive committee.
The AG’s Public Protection Unit will process relief applications.
The Oklahoma settlement comes after an 18-month investigation by attorneys general in 50 states and the U.S. Department of Justice into mortgage servicing practices that contributed to the nation’s mortgage and foreclosure crisis. Shortly after the investigation began the multistate working group began negotiating settlement terms with the banks.
In March, Iowa Attorney General Tom Miller, announced the settlement had expanded beyond investigating fraud and unlawful practices and now contained a restructuring of the mortgage industry that included mandatory modifications to loans, principle reduction and a potential fine of as much as $25 billion.
On March 16, Pruitt sent a letter to Miller, voicing strong concerns that the settlement greatly overreached the authority of state attorneys general and warned the terms created questions of fundamental fairness and justice by rewarding homeowners who stopped paying their mortgages over families who continued to make payments even if they were underwater on their loans. Pruitt also warned the settlement’s structure might encourage more homeowners to default on their loans so they could benefit from the settlement.
“We had concerns that what started as an effort to correct specific practices harmful to consumers, morphed into an attempt by President Obama to establish an overarching regulatory scheme, which Congress had previously rejected, to fundamentally restructure the mortgage industry in the United States,” Pruitt said.
While Pruitt stressed that any mortgage lender that engaged in unlawful or deceptive practices should be held accountable, he cautioned that the national settlement terms may have consequences for community banks and didn’t include Fannie Mae or Freddie Mac, whose practices played the biggest role in the mortgage housing crisis.
Pruitt also said he was gravely concerned about the impact of this settlement on local community banks.
To comment or file a complaint for foreclosure relief consideration, call the AG’s Public Protection Unit at (405) 521-2029, e-mail PublicProtection@oag.ok.gov or go online to the Oklahoma Mortgage Settlement Page at www.oag.ok.gov.
Homeowners who believe they may have been wrongly foreclosed upon will need to visit the attorney general’s website at www.oag.ok.gov and fill out the necessary paperwork for processing a claim.