To set the stage, we?ll begin with the numbers:
Five (5) servicers are subject to the settlement agreement – Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo
Amount the servicers are bound to pay Oklahoma in cash and in kind?in connection with the agreement, representing the largest federal-civil government enforcement settlement: $18,600,000.00
Estimated amount that people who lost their homes in foreclosure will receive from the state fund: $1,500-2,000 each.
?The settlement agreement is in the form of a Consent Judgment that was filed in the U.S. District Court for the District of Columbia on March 12, 2012. The Consent Judgment settles the claims specified in the Complaint, which the DOJ and the AGs simultaneously filed, and consists of several exhibits that comprise the substance of the settlement (collectively, the ?Settlement Agreement?). In exchange for a release against certain federal and state civil and administrative claims, the servicers generally agree to pay billions of dollars in consideration, to be paid through a combination of cash (i.e., ?hard dollars?) and in-kind contributions for consumer relief (i.e., ?soft dollars?), including in the form of permanent principal forgiveness on delinquent loans and refinancings of current borrowers on ?underwater loans? (for which borrowers owe more than the current value of the property). The Settlement Agreement also includes an agreement of the five servicers to adopt comprehensive servicing standards for residential mortgage loans. There are enforcement mechanisms, including the appointment of a monitor, to ensure servicer performance. The federal and state releases of certain future liability are comprehensive, but subject to various exceptions, such as criminal claims and claims relating to securitizations. Nevertheless, the settlement in its totality offers the servicers the opportunity to extinguish several actual and/or prospective claims?relating to their prior residential loan servicing and origination practices and to end some of the uncertainty that has contributed to destabilization of the housing market.
Homeowners who believe they have been victims of unfair foreclosure practices are urged to begin the process of seeking help through an $18.6 million agreement reached between the state and several banks and mortgage lenders, an official said. Homeowners have begun requesting mortgage restitution forms from Attorney General Scott Pruitt’s office, said Diane Clay, Pruitt’s spokeswoman.
The form is a questionnaire that will help Pruitt’s office determine if a homeowner has been victimized by unfair foreclosure practices by five identified banks, Clay said. “We are getting requests for the form and mailing them out, but you can also download it at our website,” Clay said. “Anyone in Oklahoma who believes they were a victim of unfair practices during their foreclosure process should apply for compensation as provided by the Oklahoma settlement.”
When filling out the form, homeowners are urged to send accompanying documents, including emails, letters, notices, court filings, hand-written notes and other communications with a bank, said Tom Bates, chief of the Public Protection Unit for Pruitt’s office.?Pruitt has faced questions over his decision to strike his own deal with bankers and lenders. Under Pruitt’s plan, Oklahoma is receiving about $10 million less than it would have received if the state had agreed to a national settlement along with 49 other attorney generals. Pruitt has defended his decision to opt out of the multistate $25 billion settlement between the states and five major lenders accused of unfair foreclosure practices.
Pruitt’s office crafted its own $18.6 million settlement with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and GMAC. All were subject to the recent $25 billion agreement. Bates said Pruitt would release more details of the state’s plan in the future, including a deadline for those applying for relief. “When the deadline is announced, you can probably expect a six-month window to apply for relief,” Bates said. The Public Protection Unit is developing an index to assess the harm and compensation needed, Clay said. The $18.6 million in relief will be placed in a special account overseen by Pruitt’s office, Bates said. The money is reserved for those believed to be victims of “robo-signing,” dual tracking or those told to stop making mortgage payments who ultimately face foreclosure, Bates said.
“There are individuals who were advised to stop paying (payments) to apply for the modification process, and what ultimately happened was they were foreclosed upon,” Bates said. “These are to be reviewed on a case-by-case basis.” Dual tracking is a process in which homeowners are told they are on track to modify their home loan to avoid foreclosure while at the same time the bank has them on a separate track to foreclose. Robo-signing involves mortgage-servicing companies affixing computer-generated signatures to foreclosure documents that require personal knowledge and verification of the information.?”The Attorney General’s program is for those foreclosed upon or on the cusp of foreclosure and who have been through the nightmarish process of (mortgage) modification,” Bates said.
In February, federal officials announced plans to modify the program by tripling financial incentives for private lenders to reduce mortgage principal for home-owners at risk of default. Oklahomans who may not qualify for Pruitt’s plan can still apply for assistance with loan-principal reductions or refinancing from the nationwide settlement, Bates said.
How to apply for the program:
Internet: If you believe you are a victim of foreclosure abuse by a lender, download and fill out this form. ?The form is also available on the AG’s Oklahoma Mortgage Settlement Information page.
You may?e-mail the AG at: PublicProtection@oag.ok.gov.
On the phone: Call the AG?s Public Protection Unit at 405-521- 2029 and an application will be mailed to you.
For information on the refinancing and mortgage reduction options provided by the federal settlement, Oklahomans whose mortgages are with the banks involved in the settlement should call the following toll-free numbers:
Bank of America: 877-488-7814
JPMorgan Chase: 866-372-6901
Wells Fargo: 800-288-3212