Georgia AG against mandated principal reductions
Georgia Attorney General Sam Olens said he's opposed to any type of national settlement with mortgage servicers that would force attorneys general to conduct principal reductions on mortgages, according to a spokeswoman for his office. Olens first made that statement to Bloomberg on Monday, suggesting he prefers a cafeteria-type approach in which AGs would pick how they use money that is allocated to states as part of any type of settlement reached with mortgage servicers. "He is opposed to principal write-downs," a spokeswoman for Olens said Tuesday. However, Olens wants attorneys general to have the flexibility to choose the best options for the funding. According to Bloomberg, Olens said as many as 20 AGs are against the idea of principal write-downs and don't believe they should be required to conduct the reductions as part of the settlement. In saying this, Olens and other AG's are backing away from one specific part of the settlement offer that state attorneys general proposed to mortgage servicers. The settlement could run as high as $25 billion, based on early discussions. When asked about the possibility of conducting their own principal reductions on mortgages earlier this year, executives with both Fannie Mae and Freddie Mac indicated that principal reductions are not part of their plans either. Write to: Kerri Panchuk.