Differences over philosophy of government kept Oklahoma out of the mortgage settlement the 49 other states struck with five national lenders, but the state still will be awarded $18.6 million in damages for borrowers seeking relief from unfair or lawful mortgage servicing practices, Attorney General Scott Pruitt said Thursday.
The state will receive the same amount in compensatory damages, for violations of state law, as if it has signed onto the national agreement, he said.
Pruitt said Oklahoma's relatively healthy housing also set it apart from the other states.
“Oklahoma is fortunate to have a stronger housing market and economy than many other states that are struggling,” Pruitt said at a news conference at his office near the Capitol. “This settlement will provide damages to those Oklahomans who did fall victim to unfair and unlawful misconduct of mortgage servicing companies, whole not exceeding the appropriate role and authority of state attorneys general.”
The lenders agreeing to the settlement are Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC. Pruitt said his office had received 86 complaints about foreclosure and loan servicing practices since October 2010 when the National Association of Attorneys General formed a bipartisan, multistate group to address issues related to the mortgage crisis. The inquiry eventually also involved federal agencies including the Justice Department, the Department of Housing and Urban Development, the Treasury, the Federal Trade Commission and the Consumer Financial Protection Bureau.
Pruitt said his concerns with the national settlement negotiation began last March when the scope of the investigation went beyond fraud and illegal practices to requiring loan modifications, principal reductions and a fine up to $25 billion.
He said he thought the national settlement overreached the power of state attorneys general. Also, he said it inappropriately benefited homeowners who stopped making house payments over those who kept paying even though they owned more than their houses were worth after the national housing market crash.
“We had concerns that what started as an effort to correct specific practices harmful to consumers morphed into an attempt by President Barack Obama to establish an overarching regulatory scheme, which Congress had previously rejected, to fundamentally restructure the mortgage industry in the United States,” Pruitt said. It started “being co-opted by Washington to turn into something to fix the housing market. That's not the role of the attorney
He also complained that the national settlement did not include Fannie Mae or Freddie Mac and that it could have negative consequences for community banks.
The attorney general's Public Protect Unit will process applications for damages. To file a complaint, call 521-2029, send an email to Public