Attorney General Scott Pruitt turned down an estimated $10.2 million that would have gone to victims of unlawful or unfair foreclosure practices, according to documents from the settlement agreement. Pruitt said he refused to join other states in a federal foreclosure agreement on the principle that the agreement went beyond the scope of attorneys general.
According to a state-by-state breakdown of the federal agreement provided by the Iowa Attorney General's Office, Oklahoma would have received $18.6 million in cash to be used for any purpose and an estimated $10.2 million that would have been paid out directly to people who were victims of bad foreclosure practices.
Instead, the Attorney General's office made a separate agreement to accept only the cash-
Only state to opt out
Oklahomans will not be able to apply for their share of the $1.5 billion earmarked for victims, which was estimated at $10.2 million for Oklahoma based on population and foreclosure rate.
Oklahoma is the only state that won't use those millions that were earmarked to go directly to individuals.
“We made the decision that, that $18.6 million was sufficient to cover the victims ... of deceptive practices by banks and in the services of foreclosures,” said Assistant Attorney General Tom Bates.
Bates said that while Oklahomans will not be able to participate in the national settlement agreement, all of the cash payment coming to Oklahoma will go directly to people for damages, while in other states the cash payments are being used for other things.
“Check and see what other states are doing with their hard dollars,” Bates said. “States aren't using that to remedy the harm this investigation was intended to remedy. They're using it to shore up other budget deficits.”
Some states are using the cash payment to go to victims, and Oklahoma could have used that money for victims under the federal settlement as well, Bates said.
Bates said the $10.2 million in damages for Oklahomans was just an estimate and that there is no guarantee that many Oklahomans would have applied for and received the $1,500 to $2,000 checks that are part of the federal settlement.
“What states are reporting they are going to get under that settlement is purely speculation,” Bates said.
People are eligible for damages if they experienced wrongful conduct during the foreclosure process, such as documents being signed electronically that require verification by a person, or dual tracking, where the mortgage company continued the foreclosure process despite ongoing loan modification discussions.
Their loans must have been held by one of the five financial institutions that are part of the settlement agreement.
“The attorney general took a principled stand on this and that stand was based on his view of the proper role of the Attorney General's Office,” Bates said.
Pruitt said in previous interviews that the scope of the investigation went beyond fraud and illegal practices and began requiring loan modifications and principal reductions.
He called it an “overarching regulatory scheme” to “fundamentally restructure the mortgage industry in the United States.”
Oklahomans likely still will benefit from the loan modifications, blight remedies, short sales and principal reductions required as part of the agreement because the industries still operate inside the state and must comply with the federal agreement.
The entire $25 billion settlement will be split as a payment directly to states; the costs associated with refinancing mortgages; payments to borrowers who were foreclosed upon; and, finally, a menu of remedies lenders will have to perform such as loan modifications, short sales and blight prevention.
AT A GLANCE
How to apply for relief
To apply for relief from the $18.6 million Oklahoma settlement, fill out a form from www.