Oklahoma AG working toward own deal in foreclosure settlement

Oklahoma Attorney General Scott Pruitt may break away from the other 49 state AGs to forge his own settlement with mortgage servicers targeted in a recent nationwide foreclosure investigation. Last fall, nearly every major servicer had to hold up foreclosure proceedings to fix improperly signed affidavits and other loss-mitigation problems. Federal regulators and the 50 AGs launched investigations. The Office of the Comptroller of the Currency and the Federal Reserve settled with these companies last week, but the coalition of AGs and other regulators continue to negotiate. Reports show the coalition is pushing for stricter penalties than the OCC and the Fed deal. Some of the coalition’s terms include mandatory modifications, principal reduction and a potential fine of as much as $25 billion. Not everyone in the coalition is on board, however. “Attorney General Pruitt has instructed his public protection team to craft a settlement that is specific to Oklahoma’s concerns of punishing bad actors while respecting the appropriate role of attorneys general,” a spokesperson for Pruitt’s office said in a statement. At least a dozen AGs do not back the proposal. Four Republican AGs from Florida, Texas, Virginia and South Carolina wrote a letter in March to lead investigator Tom Miller, the Iowa AG , saying the talks go beyond the responsibilities of their offices. Miller declined to comment on Pruitt’s move to seek his own terms. “This alternative to the current proposed term sheet could provide other states with a model to consider,” according to Pruitt’s statement. Pruitt’s office sent another statement Thursday clarifying the alternative proposal. “He has instructed his staff to prepare an alternative agreement in the event the 50-state negotiations do not produce a compromise that does not include a cram down feature,” his office said. Bloomberg reported Pruitt’s decision Wednesday. Write to Jon Prior. Follow him on Twitter @JonAPrior.