Oklahoma's attorney general this week began sending the first of hundreds of mortgage settlement checks to homeowners who were victims of wrongful lending practices and, in some cases, lost their homes as a result.
Attorney General Scott Pruitt said the payments are the first mortgage compensation returns in the nation to be delivered to victims of unfair and deceptive practices by five national lenders: Bank of America Corp., Citigroup, JPMorgan Chase & Co., GMAC and Wells Fargo & Co.
Oklahoma was the only state that did not sign off on a $25 billion settlement with mortgage lenders, instead reaching a separate $18.6 million settlement with the companies. All mortgage compensation checks in the state will be sent by January, Pruitt said. National settlement checks will not be sent until April at the earliest, he added.
Pruitt said the settlement will hold lenders accountable for the practices committed during the height of the nation's financial crisis. Those practices include robosigning, or signing documents without proper oversight, and dual-tracking, involving guiding homeowners on adjusting mortgages while pushing ahead with foreclosure.
A total of 732 Oklahomans applied for relief from the Oklahoma Mortgage Settlement Fund, and 107 have been approved so far. Mortgage compensation checks will range from $5,000 to $20,000, averaging $11,000.
Estimates indicate that residents of states participating in the national settlement could receive as little as $840 and no more than $2,000. Pruitt said those states are using some of their settlement money to fund areas unrelated to housing, including higher education, economic development, marketing and hiring additional staff for attorneys general offices.
The Oklahoma settlement money that does not go to homeowners will be used to fund a $1.27 million grant to Legal Aid Services of Oklahoma to provide free legal assistance to low-income residents facing mortgage and foreclosure issues. The money also will help pay for legal services for veterans and active service members in connection with mortgage and housing needs, according to the AG's office.