Olens against principal write-downs

Jessica M. Karmasek Jun. 21, 2011, 1:43pm

Sam Olens

ATLANTA (Legal Newsline) -- Georgia Attorney General Sam Olens says he is opposed to a national settlement with mortgage servicers that would force state attorneys general to conduct principal write-downs.

A spokeswoman for Olens told Housing Wire, a financial news service for the mortgage market, that the attorney general wants some flexibility in how he and other attorneys general use funds that are given to the states as part of a settlement.

Attorneys general, the U.S. Justice Department, the Treasury Department and the Consumer Financial Protection Bureau are currently negotiating a settlement with the country's five largest mortgage servicers, including Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., and Ally Financial Inc.

The settlement is said to be as much as $25 billion.

The mortgage foreclosure probe began in October with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.

Olens told Bloomberg News that other attorneys general -- as many as 20 -- are against principal write-downs. Both Texas Attorney General Greg Abbott and Florida Attorney General Pam Bondi have already come out against the reductions.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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