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Pruitt rejects about $10 million for Oklahoma foreclosure victims

The decision for Oklahoma not to participate in the national foreclosure settlement agreement leaves borrowers who experienced unfair and unlawful foreclosure practices unable to apply for a pool of $1.5 billion set aside for victims.
BY MEGAN ROLLAND Published: February 17, 2012

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-payment amount to the state for $18.6 million from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC.

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.

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