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.
