Oklahomans who lost their homes to foreclosure or were harmed by deceptive banking practices during the nation’s housing crisis have until Thursday to apply for part of an $18.6 million settlement with the nation’s largest lenders.
More than 326 mortgage-related complaints already have been filed with Oklahoma’s attorney general’s office, and more are expected this week as the deadline nears.
“We just don’t want people to get to Sept. 14 and hear about it,” said Diane Clay, a spokeswoman for the attorney general’s office, which is processing the applications. “A lot of people, even if they didn’t lose their homes, will qualify for this if the harm happened before December 2011.”
Some of the practices banks engaged in that are covered under the settlement include robo-signing, where signatures were applied to documents without proper oversight, or dual-tracking, which involves banks guiding homeowners on adjusting mortgages while at the same time pushing ahead with foreclosure. Any homeowner who believes their foreclosure or loan modification involved unfair practices are being urged to apply, Clay said.
“There was a big range of harm, and that’s what this particular settlement is dealing with,” she said.
Oklahoma was the only state that did not sign off on a $25 billion settlement agreement with the nation’s largest mortgage lenders, but instead reached a separate agreement in which the lenders will pay $18.6 million to the state.
Oklahoma’s settlement involves the same five lenders involved in the national agreement: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC.
Oklahoma Attorney General Scott Pruitt has said the state reached a separate agreement with lenders over concerns that the national settlement had broadened into an attempt by President Barack Obama’s administration to restructure the mortgage industry rather than compensate victims of lending abuses.
Clay noted that Oklahomans still are eligible to participate in the national settlement’s options to refinance and adjust mortgage principal if they meet certain criteria and their mortgage was with one of the five lenders involved in the settlement. Refinancing is available to homeowners who owe more than their home is worth, while principal adjustments are being offered to those who are behind on their mortgage payments and owe more than the value of their home.
“Anyone who needs refinancing help or modification on their mortgage, they should contact one of the five servicers, and they can work with them to get that done,” Clay said.
Clay said it’s too early to determine the range of payments that qualifying homeowners will receive, but that payments will be a minimum of $2,000 but substantially more in many cases.
Once the money is distributed, Clay said the remaining funds will be used to bolster housing programs in the state, although she said no specific programs have been identified.
Brian Huddleston, a Tulsa real estate attorney experienced in foreclosure law, said most of the cases he deals with involve hardworking, regular Oklahomans who fall temporarily fall behind on their mortgage payments and then can’t get caught up.
“The reasons range from divorce, to the death of a wage earner, or certainly the loss of a job,” Huddleston said. “All of these things that cause people to get behind are temporary, but then the banks won’t let you start paying again and they’re proceeding on with the foreclosure.”
Huddleston said he would like to see the attorney general’s office use the remaining proceeds to offer long-term, low-interest loans to Oklahomans who find themselves in this situation and are able to pay their mortgage.
“That would be excellent, and the money would go a lot further because people would pay money back into the fund,” he said. “I’ve had one foreclosure where $12,000 would get them back to where they needed to be, but they just didn’t have the money.”