Zachary and Melissa Zuniga of Tulsa received the first compensation from Oklahoma's go-it-alone $18.6 million mortgage settlement with five big lenders on Monday — a $20,000 check presented by Attorney General Scott Pruitt.
It was the first of a possible 732 individual payouts from the agreement Pruitt negotiated with Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC separate from the settlement the 49 other states and federal government struck with the lenders.
Pruitt said in some cases payments in Oklahoma could be more than 20 times the money received under the national settlement.
In addition to direct payments, the attorney general's office is using part of the state's settlement to work with Legal Aid Services of Oklahoma, the Oklahoma Bar Association and Oklahoma Lawyers for America's Heroes Program to help troubled homeowners stay in their homes.
The Zunigas, who have three children, were among the first 100 recipients of funds from the Oklahoma settlement, ranging from $5,000 to $20,000. For the others, the checks, at an average of $11,000, are in the mail.
Pruitt said at a news conference that the latest estimates indicate individuals in other states could receive as little as $840 from the national settlement. The Attorney General's Public Protection Unit continues work on the other 600-plus cases.
“I can definitely say this, for a family of five with one on the way, that it will absolutely change our lives,” said Zachary Zuniga, a manager for Tulsa-based Reasor's Foods.
The Zunigas lost their home after a year-and-a-half ordeal with Citigroup, he said — letting slip the lender although having been asked not to name it.
After two stabs at a mortgage modification — and just as he thought a third attempt was getting under way — came a sheriff's sale of the Zuniga home, valued about $105,000, in June 2011.
“With our backs against the wall, we finally found a rental home in the same neighborhood where we lived. I've lived in this house since 1988, with my parents. I grew up in this house. I started my family in this house. We had our children in this house,” Zuniga said, a look of pain on his face.
“We stayed in the same neighborhood so the kids could stay in their schools and keep their friends, 'cause after losing their home, they didn't need (to lose) anything else.”
Now, he said, “with a minimal amount of debt that we'll be able to pay off, we'll be able to have money in the bank and we'll be able to take care of things that seemed so far away a year ago.”
AG explains action
Pruitt took the occasion to extol justice.
“You know, Benjamin Franklin said that justice will not be served until those who are unaffected are as outraged as those who are,” he said, mentioning two practices engaged in by the big banks, “robo-signing” and “dual tracking,” which incensed the federal government and state attorneys general and led to the national investigation.
With robo-signing, signatures were automatically attached to documents rather than after being personally reviewed by bank employees, as the law required. In dual tracking, banks advised homeowners to go delinquent on their mortgages, claiming it would trigger a review and adjustment and save them from foreclosure, while at the same time preparing to foreclose regardless.
“There was true wrongful conduct that banks engaged in across the country, affecting families and individuals in a powerful way, and many lost their homes, and Oklahoma suffered and dealt with that just like other states across the country,” Pruitt said. “Real harm occurred to Oklahomans, harm that ultimately led to some families losing their homes, harm that led to some families being on the verge of foreclosure. They suffered wrongful conduct.”
Earlier this year, Pruitt said he withdrew from the national negotiation in early 2011 because it had become an attempt to “fix the housing market” by requiring loan modifications and principal reductions rather than just seeking damages for fraud and unlawful practices.
“We took a bold step in March of this year and we said, you know, we're going to focus in Oklahoma on making sure that Oklahoma families receive relief — that when they experience harmful conduct they were going to get more than just an arbitrary check for $2,000 — that our office was going to look into each and every case and say: What kind of harm did you suffer, and how can we provide relief to you?
“You know, those families who lost their homes, we cannot undo that process, and there were a few across the state of Oklahoma that did. We cannot give them back their home. But what we can do is provide them a measure of relief, penalties, monies, that will assist them on the next stage of their life.”