Oregon Attorney General John Kroger likes what he sees in final deal between the multistate AG coalition and mortgage servicers. He said Wednesday he will sign onto a settlement.
But Kroger also said he wants to join the federal task force investigating securitization and other lending mispractices at the largest banks.
Kroger said details of the entire robo-signing agreement will be released soon, after more than one year of negotiations. In the fall of 2010, evidence surfaced of the largest servicers signing foreclosure affidavits en masse without a proper review of the loan file as required by law in many states.
The settlement will force the top-five servicers to pay roughly $25 billion to the states that sign. The Department of Housing and Urban Development said Wednesday that $17 billion will be used for principal reductions. Between $2 billion and $3 billion will be used for housing counseling and legal aid.
A spokesperson for Iowa AG Tom Miller, who has led the talks, said the deadline was extended for states to sign the deal to Feb. 6 from Friday at the request of an undisclosed AG. The multistate coalition will file the judgment in federal court assuming it gets a sufficient number of sign-ons.
Kroger did disclose what Oregon would get.
Servicers would provide between $100 million to $200 million in relief to underwater borrowers in the state. Another $30 million will go to the state itself.
Kroger added the deal includes “tough new servicing standards.”
“This agreement penalizes banks that engaged in wrongful foreclosure practices and brings badly needed relief for distressed homeowners,” Kroger said.
The deal will not release the banks from securitization and other lending claims being investigated by led federal task force led by New York Attorney General Eric Schneiderman and the Department of Justice.
“Because the release in this agreement is narrowly drafted, it will allow Oregon to pursue these matters aggressively,” Kroger said. “Simply put, I am not confident we could get a better agreement on this limited set of issues if we litigated for several more years.”