Oregon’s attorney general agreed to join a proposed multistate settlement over foreclosure and mortgage-servicing, saying it penalizes banks and offers relief to homeowners.
The settlement will provide $30 million to the state and as much as $200 million in relief to Oregon homeowners, including those facing foreclosure, Attorney General John Kroger said today in a statement.
“This agreement penalizes banks that engaged in wrongful foreclosure practices and brings badly needed relief for distressed homeowners,” 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.”
All 50 states announced an investigation into bank foreclosure practices in 2010 following disclosures that companies were using flawed documents in seizing homes. A group of state attorneys general and federal officials have since negotiated terms of a proposed settlement that would set standards for how banks conduct foreclosures while providing mortgage relief to borrowers.
States have until Feb. 3 to decide whether to accept the settlement with Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc.
Connecticut Attorney General George Jepsen said in an e-mailed statement yesterday that he would also sign on to the agreement. The deal “would impose tough new servicing standards on banks and hold them accountable for what have become familiar abuses,” he said.
Kroger said the liability release in the agreement is “narrowly drafted” and would allow investigations in to mortgage securitization by banks. Some states have raised concerns about the releases, saying they shouldn’t protect banks from claims that haven’t been investigated.
The agreement must be submitted to a federal judge for final approval, Kroger said.
Editors: Fred Strasser, Stephen Farr