The deadline is nearing for Oklahoma homeowners who believe they were wronged by unfair or illegal mortgage and foreclosure practices to seek damages from the state's settlement with five big lenders.
The cutoff comes Sept. 13, but people should act sooner because many require follow-up and more documentation than people think, said Diane Clay, director of communication for the attorney general's office.
Go to www.oag.ok.gov/oagweb.nsf/mortgageinfo.html to apply for compensation, or call (404) 521-2029.
Must show harm
Oklahoma will receive $18.6 million in its settlement with Bank of America, Citigroup, GMAC, JPMorgan Chase and Wells Fargo. The attorney general's Public Protection Unit, which is handling the money, is working on an index to use to distribute the settlement money based on each homeowner's showing of actual harm.
Officials had no estimate of individual compensation, but said it will be greater, and come faster, than under the national agreement.
“These funds are intended for homeowners who were harmed by specific unfair and deceptive practices. When applying for compensation, homeowners should provide all documentation of these practices in their specific case,” the attorney general's office says in a fact sheet on its website.
People harmed by “robo-signing” and “dual tracking” are the attorney general's first priority.
Robo-signing had signatures automatically attached to documents rather than after personal review by bank employees, as the law required. With dual-tracking, banks advised homeowners to go delinquent on their loans, claiming it would trigger a loan review and adjustment and save them from foreclosure, while at the same time preparing to foreclose regardless.
The state struck a separate deal from the national settlement involving the other 49 states after Attorney General Scott Pruitt withdrew from the national negotiation with the lenders in early 2011, saying it had become politicized. Pruitt argued that the national deal implemented policy in an attempt to “fix the housing market” by requiring loan modifications and principal reductions rather than merely seeking damages for fraud and unlawful practices.
When the state settlement was announced in February, Pruitt said he thought the national settlement overreached the power of state attorneys general, inappropriately benefited homeowners who stopped making house payments over those who kept paying even after the housing crash sent them underwater, and would harm community banks.
So far, the attorney general's office has received almost 700 calls from people asking about the state's settlement; 405 restitution claim forms have been mailed to people requesting them; and 73 consumer complaints “alleging modification-related wrongdoing” — covered under the national settlement — have been forwarded to the five loan servicers.
“In an effort to reach the greatest number of potential claimants, we also sent letters to 126 consumers who had filed foreclosure or modification-related complaints with our office before the settlement to make sure they were aware of the new Oklahoma settlement, and encourage them to fill out a restitution claim form,” Clay said.
There is no way to compare consumer response to the state settlement in Oklahoma with response in other states to the national settlement because the agreements are so different, said Tom Bates, chief of the attorney general's Public Protection Unit.
Some states, he said, earmarked their share of the national settlement for things that are unrelated to housing.
In the national settlement, the five banks reported that they had provided $10.56 billion in consumer relief to 137,846 borrowers through June, most of it, $8.7 billion, in the form of payment foregone from short sales — selling homes for less than was owed on them.
That's according to the federal Office of Mortgage Settlement Oversight, set up as part of the agreement, which issued its first report this week.
Joseph A. Smith, a former North Carolina banking commissioner who leads the office, also said much progress had been made in new loan servicing standards required by the national settlement, such as a single point of contact for each borrower, improved customer service, more consumer-friendly loan modification practices, protection for members of the armed services and tenant rights.
The national settlement “can contribute to reconstruction of our country's system of mortgage finance and restoration of the mortgage market to health,” Smith said in the report, available at tinyurl.com/SettlementFirstTake.
“I believe we have made a good first step; more hard work remains,” he said.
The Office of Mortgage Settlement Oversight's website is www.mortgageoversight.com/.