Okla. AG Pruitt touts returns for homeowners in separate foreclosure deal

WASHINGTON (Legal Newsline) - Oklahoma Attorney General Scott Pruitt says affected homeowners in his state are reaping the benefits of his decision to abstain from the $25 billion national foreclosure settlement.

Pruitt was the only state attorney general who did not sign into the $25 billion settlement reached earlier this year with the five largest mortgage servicers - Wells Fargo, JPMorgan Chase, Citigroup, Ally Financial and Bank of America.

Oklahoma received $18.6 million from the five in a separate settlement and says that money is going straight to homeowners.

"I believe we've provided meaningful relief to homeowners," Pruitt said Wednesday during an interview after he participated in a discussion at the 13th Legal Reform Summit at the U.S. Chamber of Commerce.

That meaningful relief has included approximately 700 homeowners receiving an average of $11,000. Estimates have homeowners participating in the national settlement possibly receiving an average of only $2,000.

Oklahoma has also adopted a voucher program that allows affected homeowners to pay for an attorney to represent them.

"We're the only state in the country that has provided a direct benefit to its citizens," Pruitt said.

Ultimately, he believes the multistate investigation headed by Iowa Attorney General Tom Miller was a positive for the purpose of information-gathering. He just didn't agree with the deal that was struck.

He first let his concerns be known in a letter to Miller. He felt the deal created questions of fairness and justice by rewarding homeowners who stopped paying their mortgages over families who continued to make payments even if they were underwater on their loans.

He said he feared the deal would end up encouraging more homeowners to default on their loans so they could benefit from the deal. Oklahomans are still eligible to participate in the national settlement if they want to refinance and adjust mortgage principal.

Maryland Attorney General Doug Gansler said Wednesday that talks with "the next group of banks" are ongoing. Pruitt says he is not privy to them, but he won't automatically seek a separate agreement again if a settlement is reached.

The U.S. Chamber Institute for Legal Reform owns Legal Newsline.

From Legal Newsline: Reach John O'Brien at jobrienwv@gmail.com.