WASHINGTON — Oklahoma Attorney General Scott Pruitt announced Thursday he had reached an independent agreement with the top five mortgage servicers after refusing to sign off on a deal agreed to by every other state in the country.
The servicers — Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Wells Fargo & Co.and Ally Financial Inc. — agreed to pay Oklahoma a total of $18.6 million in damages to resolve claims of unfair and unlawful practices.
Pruitt, a Republican, cited strong objections to the nationwide deal, arguing that the other 49 state attorneys general had gone beyond their authority by pushing for principal reductions on loans to troubled borrowers.
"We had concerns that what started as an effort to correct specific practices harmful to consumers morphed into an attempt by President Obama to establish an overarching regulatory scheme, which Congress had previously rejected, to fundamentally restructure the mortgage industry in the United States," Pruitt said in a press release.
Yet the deal was not seen in partisan terms on Capitol Hill, where lawmakers from both sides of the aisle praised it while saying they wanted to see more details. Of the 49 state AGs that signed the deal, roughly half were Republicans.
Still, Pruitt said the deal will hurt community banks and noted it did not include Fannie Mae and Freddie Mac, which he claimed "played the biggest role in the mortgage housing crisis."
"This settlement will provide damages to those Oklahomans who did fall victim to unfair and unlawful misconduct of mortgage servicing companies, while not exceeding the appropriate role and authority of state attorneys general," Pruitt said.