The Edmond Sun

August 27, 2012

Deadline approaches for victims of unfair lending to apply for relief

Cary Aspinwall

OKLA. CITY — Oklahomans who were victims of mortgage companies’ “unfair and deceptive” practices only have a few weeks left to apply for restitution through the Attorney General’s Office.

“We’re hoping that they don’t wait until the day before the deadline because that might not give them enough time to gather what they need to apply,” spokeswoman Diane Clay said.

After opting Oklahoma out of a national settlement, state Attorney General Scott Pruitt helped negotiate an $18.6 million agreement in February for compensatory damages for Oklahoma homeowners who were victims of practices such as dual-tracking or robo-signing by Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC during the mortgage and foreclosure crisis.

The deadline to apply is Sept. 13.

Since the announcement of Oklahoma’s settlement, consumer representatives at the Attorney General’s Office have fielded nearly 700 telephone calls from residents with questions about the settlement, she said.

Pruitt opted Oklahoma out of the multistate $25 billion settlement that the 49 other states agreed to adopt. Under the federal settlement, states also received millions of dollars for additional avenues of relief for homeowners — including principal reduction programs and refinancing options for homeowners who owe more than their home is worth.

Pruitt has said Oklahoma crafted its own settlement with the banks subject to the federal agreement because he wanted to focus on compensatory damages for home-owners who were victims of “unfair and deceptive” practices by the mortgage-servicing industry.

Other state programs offering principal reduction and refinancing assistance drifted too far from the original goal of the national investigation by various state attorneys general, Clay said.

“The whole reason the states started the investigation was to see if there was any wrongdoing on the part of these banks,” Clay said. “Then all of a sudden, it shifted from that to include housing policy issues.”

Pruitt’s goal was to draft a settlement program that would give his office “more control and ability to help our own citizens and offer restitution that was meaningful,” Clay said.

Applying for Oklahoma’s relief program does not prevent anyone from applying for federal programs designed to help homeowners who are under water or behind on their payments.

Under Oklahoma’s agreement, homeowners harmed by practices such as dual-tracking will likely receive more money, Clay said.

“Under the federal program, the maximum they would have gotten for that is $1,500 to $2,000,” she said. “With Oklahoma doing our own settlement, we are not bound by those limits, we can set those limits ourselves.”

State officials are currently working on developing an index to set levels of compensation for homeowners, based on values assigned to different types of harm.

“It will be kind of like a triage system,” Clay said.

One of the most egregious examples the office has seen is that of an Oklahoma family whose mortgage company sold their policy and added unnecessary and unwanted hazard insurance, causing their monthly mortgage payment to jump from $1,500 to $2,300.

They eventually couldn’t pay and asked for help, Clay said. The mortgage company told them not to make their payment for three months so they could become delinquent and then qualify for an assistance program.

The family signed up for the company’s foreclosure prevention program — and although they did everything they were told to do, the company was secretly dual-tracking them toward foreclosure, Clay said.

Eventually, the home was foreclosed on and sold at auction.

Some 326 mortgage-related complaint files have been opened by the office, and 73 consumer complaints alleging modification-related wrongdoing (covered under the federal settlement) have been processed to the five mortgage servicers involved, she said.

They also sent letters to 126 consumers who had filed foreclosure or modification-related complaints with the Attorney General’s Office before the settlement was announced to make sure they were aware of the new program and encouraged them to fill out restitution claim forms.

Homeowners who want to know if they’re eligible are encouraged to call 405-521-2029, so consumer representatives can help them review all potential options. They may not qualify for relief through Oklahoma’s settlement but may still qualify for those arms of federal programs through the banks.

“People need to call and we can help them work through that process,” she said.

Relief from unfair lending

Oklahomans who think they were subjected to unfair and unlawful practices during the foreclosure process can apply for compensation at  or by calling 405-521-2029.

The state is developing an index to determine how to compensate Oklahoma residents if they’ve been harmed by unfair lending practices.

Homeowners who aren’t sure if they qualify for the program are encouraged to call the office and answer some basic questions to see if they may benefit. Only Oklahoma residents are eligible, and the home in question must be the primary residence.

Applications must be received by Sept. 13.

Applying for aid through Oklahoma’s settlement does not prevent homeowners from applying for the national programs through the five included banks, which include refinancing options for people who are current on their payments but who owe more than the current value of their home, and principal reduction options for people who are delinquent on their mortgages.

For information on the refinancing and mortgage reduction options provided by the federal settlement, Oklahomans whose mortgages are with these banks should call the following toll-free numbers:

Bank of America: 877-488-7814

Citigroup: 866-272-4749

GMAC: 800-766-4622

JPMorgan Chase: 866-372-6901

Wells Fargo: 800-288-3212

What other states are doing

Under the state’s unique program, Oklahoma home-owners who were foreclosed upon or incurred financial harm due to mortgage industry practices like robo-signing and dual-tracking may get more money than homeowners with similar problems in other states, according to Attorney General Scott Pruitt’s office.

But homeowners in the other 49 states may have more options if they’re in danger of losing their home.

Take the case of neighboring Arkansas — which has 850,000 fewer residents than Oklahoma — and will receive an estimated $39.4 million through the settlement, according to the Arkansas attorney general. That’s $20 million more than Oklahoma is getting through Pruitt’s agreement.

Arkansas lenders will dedicate approximately $11.8 million toward first- and second-lien principal reduction and other forms of loan modification relief in Arkansas.

Another $5.7 million will be set aside for refinancing the loans of borrowers in Arkansas who are under water — meaning their homes are now worth less than they owe on their mortgages.

Arkansans who lost their homes to foreclosure from Jan. 1, 2008, to Dec. 31, 2011, and suffered from unfair/deceptive practices by mortgage servicers would be entitled to a share of approximately $8.5 million, according to the Arkansas Attorney General’s Office.

Cary Aspinwall 918-581-8477