Mortgage fund checks go out
BY CARY ASPINWALL World Staff Writer
Monday, October 22, 2012
3/11/13 at 1:58 PM
Joyce Jackson mailed off an application to the Oklahoma attorney general's mortgage settlement fund this summer, not expecting much as a result.
This week, she received a check for $10,000 from the settlement fund.
"I was astonished," she said. "I just couldn't believe it."
Jackson said she first learned about the settlement fund by reading the Tulsa World, and was encouraged to apply by the Attorney General's Office after the story of her mortgage woes appeared in the World this past July.
Jackson had to liquidate more than $6,000 of her life savings to fight foreclosure on her older sister's home, which left both women, who are in their 80s and on fixed incomes, in a serious financial pinch. Jackson took over managing her sister Doreen Woods' finances after an illness left her with lingering memory and health issues.
Jackson had applied for a mortgage modification for Woods' Sand Springs home, and believed their mortgage servicer began foreclosure proceedings without their knowledge at the same time.
The process is called "dual tracking," and its one of several industry practices that led to a $25 billion national foreclosure settlement announced in February with the nation's five largest mortgage servicing companies: Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC.
Oklahoma was the only state to opt out of the larger national settlement, with Attorney General Scott Pruitt announcing he would instead use $18.6 million offered as a payment directly to the state to provide "real and substantial relief" to residents harmed by practices such as dual tracking or robo-signing.
But that meant turning down a projected $28 million in additional benefits to home- owners, including refinancing options for underwater homeowners and principal reduction. Pruitt argued that those programs drifted too far from the original goal of the investigation into unfair business practices by various state attorneys general.
Pruitt's office has estimated that $7.5 million of Oklahoma's settlement fund could be used for direct payments, but spokeswoman Diane Clay said that number could change.
"We will not know how much money will be put toward direct payments until every claim file is reviewed and a dollar figure attached," she said.
The average payout of the first round of checks for Oklahoma's settlement so far is $11,000, Clay said. The largest amount awarded will be $20,000. The smallest will be $5,000 (though not all claims will receive funds if they failed to provide adequate documentation to substantiate the claim, she said).
In the national mortgage settlement, the $1.5 billion dedicated to direct payments for homeowners will likely result in payments of $1,500 to $2,000 per claimant maximum, based on how many people apply and when the payments are issued.
Other states have said they may use a portion of their state's recovery money from the national settlement for direct payment to homeowners who were victims of wrongdoing by their mortgage servicers. Meaning, in theory, Oklahoma could have accepted and used its $18.6 million for direct payments to homeowners in addition to the national settlement money dedicated for that purpose.
"However, we are unaware of any state committing to such a process or setting any guidelines for how such a program would operate," Clay said.
The $10,000 check does not fix all of Woods' financial woes; she still needs help fixing up and selling the home her sister can no longer live in. But the money should help greatly.
"It was just a godsend," Jackson said.
Oklahoma's settlement: How else will the money be used?
In addition to the direct payments to families, the Attorney General's Office has committed $1.275 million to Legal Aid Services of Oklahoma to provide legal representation to lower income families and seniors who have foreclosure and modification-related legal issues.
Another $15,000 will be dedicated to the Oklahoma Bar Association's America's Heroes Program, which provides legal assistance to Oklahoma military veterans and soldiers.
And an additional $50,000 will go to the Oklahoma Bar Association to fund investigation and prosecution of anyone falsely representing that they are attorneys who can save Oklahomans from foreclosure.
There will also be $37,000 spent on training for attorneys in partnership with the Oklahoma Bar Association for a voucher program. The voucher program is included along with the Legal Aid program under the name Resolution Oklahoma. It's intended to provide up to $5,000 of legal assistance to deserving Oklahomans with foreclosure-related legal problems who do not qualify for need-based assistance programs like Legal Aid. The voucher program will run through the end of the fiscal year with the option of continuing for another fiscal year, spokeswoman Diane Clay said.
There are no additional assistance/relief programs planned at this time, Clay said. Oklahomans who may have missed the September application deadline for the settlement fund are encouraged to contact the Attorney General's Office after Feb. 1, 2013, to see if there will be a second window available to submit claims, depending on how much money remains in the settlement fund, she said.
Cary Aspinwall 918-581-8477
Joyce Jackson (left) at her house with her older sister Doreen Woods whose house in Sand Springs is going through forclosure because of illness and financial troubles. STEPHEN PINGRY / Tulsa World File