Oklahoma went its own way on the national mortgage settlement, and some homeowners facing foreclosure wonder whether it will pay off in the end.
After opting Oklahoma out of a $25 billion national settlement earlier this year, state Attorney General Scott Pruitt helped negotiate a separate $18.6 million agreement that varied drastically from settlements accepted by the other 49 states.
Pruitt said his settlement would focus on compensatory damages for Oklahoma homeowners who were victims of "unfair and deceptive" practices such as "dual tracking" or "robo-signing" by Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC during the mortgage and foreclosure crisis.
Pruitt spokeswoman Diane Clay said the more than 700 Oklahomans who applied should expect to start getting responses to claims after Oct. 15. The Attorney General's Office will begin mailing the first wave of checks on that date, Clay said.
Paula Wessling-Choate isn't sure what to expect - if anything - from the claim she submitted to the Attorney General's Office in May. She's afraid she'll lose the home near Shawnee where she lives with her husband, daughter, toddler, granddaughter and 80-year-old mother, regardless.
Her family's foreclosure woes began after a tornado damaged the home in May 2010 and then hail damaged it further a few days later. A few weeks later, after power was restored and repairs were made, their insurance company issued a check for more than $7,700 to cover the damages.
The check was written to her family and Bank of America, their mortgage servicing company. Bank customer service representatives told her to mail the check to the bank so they could endorse and send it back to her to pay for the repairs.
Two years later, Wessling-Choate is still waiting for that check.
In the meantime, the financial strain of paying for those repairs out of pocket caused the family to fall behind on the mortgage.
Wessling-Choate was laid off from her job in project management in 2009 and has since been caring for her young granddaughter during the day. Her husband is a sheet metal mechanic, and they have a teenage daughter and several adult sons who all work, including one in the U.S. Army Special Forces.
They immediately asked the Bank of America for help postponing or modifying their monthly mortgage payment in the wake of a natural disaster but were told they could get help only if they were at least 30 days past due, she said.
Two years later, Wessling-Choate is also still waiting to hear specific details of a mortgage modification she was offered in September 2011. She would send in additional paperwork, only to be told the bank didn't receive it. Customer service employees would promise to check on the status of her modification but would never call back.
"It's not like we're not hard-working people," she said. "We didn't do anything wrong. We asked for help in a trying time."
Their monthly payment has since increased due to insurance and fees. They haven't made payments in several months, because partial payments they sent in were returned after the bank filed for foreclosure, she said.
In the meantime, the Bank of America filed for a summary judgment against her and on Aug. 30 was awarded more than $148,000 and $4,575 in attorney fees, plus court costs.
"Now they say I owe this large amount of money that I don't," she said. "If it wasn't for them, I wouldn't be in this mess. We did everything we were told to do."
A Bank of America spokeswoman said she would research Wessling-Choate's case. She did not offer further comment before publication of this story.
Wessling-Choate applied for relief through the Oklahoma attorney general's fund in May, nearly as soon as the office began taking applications. She also applied for her case to be reviewed through the federal government's Independent Foreclosure Review program, through the Office of the Comptroller of the Currency.
But she's not sure either option will prevent her home from landing on the foreclosure auction block.
"We could still lose our home," she said.
If Oklahoma has remaining funds that could be used for housing counselors or legal aid to help distressed homeowners, more people could get help before their house ends up on the auction block, Wessling-Choate said.
"There's nowhere for me to go, except the bank - and they don't want to help," she said.
Joyce Jackson was encouraged by Pruitt's office to apply for the mortgage settlement program after her story appeared in the Tulsa World this summer.
Jackson, 82, manages the finances of her older sister, who has health and memory issues. Jackson said she believed that her sister's mortgage servicer began foreclosure proceedings without their knowledge at the same time it told them they were eligible to apply for mortgage modification. Such a process is called "dual tracking."
Jackson said she drained her life savings to save her sister's home from foreclosure and is anxious to learn what type of relief she and her sister might receive through the Oklahoma settlement program.
"It's a very frightening thing to live with," Jackson said. "And we were fortunate in that we were able to buy them off. I know that there are people who've actually lost their homes, so I hope this is something that will benefit the people who've been through that."
Jackson said she wonders whether Oklahoma should have opted for its share of the national settlement, instead.
Other state programs offering principal reduction and refinancing assistance drifted too far from the original goal of the national investigation by various state attorneys general, Pruitt argued when negotiating Oklahoma's separate settlement.
Other states received as much as $25 million in estimated homeowner benefits to be used for things such as counseling, legal aid, settlement funds and consumer education.
Pruitt's office said it will announce a plan Oct. 15 to spend any funds that remain after individual homeowners are compensated.
Cary Aspinwall 918-581-8477
cary.aspinwall@tulsaworld.com
Original Print Headline: Mortgage settlement has some skeptical
