Oregon Joins Servicer Settlement

The Attorney General of Oregon announced
today that he will join in the so-called 50-state Attorneys General settlement
with five major financial institutions that operate the large servicing
organizations.  The settlement arose out
of a multi-state investigation of alleged improprieties the servicers’
management of delinquent loans and foreclosures. 

Attorney General John Kroger said in a
prepared statement that “The Oregon Department of Justice is deeply committed
to protecting consumers.  In assessing
any potential consumer protection settlement I compare the benefits of the
settlement with potential benefits that might accrue in the future if we chose
to litigate rather than settle.  I have
made that assessment in this case, and I am confident that signing this
agreement is in the best interest of Oregon consumers.”

Several attorneys general have remained
in settlement talks while pursuing litigation on their own while at least one, California’s
Kamala Harris, withdrew from the settlement saying it provided inadequate
redress to the homeowners of her state. 

Kroger said that the settlement
agreement penalizes banks which engaged in wrongful practices and brings badly
needed relief for homeowners.  However,
because the release in the agreement is narrowly drafted, Oregon will be able
to pursue both multi-state and independent investigations of illegal
securitization and other practices.  “Simply
put,” he said, “I am not confident we could get a better agreement on this
limited set of issues if we litigated for several more years.”

The Attorney General said further
information on the agreement would be forthcoming but he released the following
highlights:

  • An estimated $30 million to the State of Oregon.
  • An estimated $100 to $200 million in relief to
    distressed Oregon homeowners including “underwater” borrowers
    and homeowners facing foreclosure.
  • Tough new servicing standards that protect all
    homeowners from unfair and unscrupulous servicing practices.

The agreement is not final and must
be submitted to a federal judge for approval.

…(read more)

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