Tentative settlement includes tough loan rules
Oregon is joining in a multistate legal action against five major financial institutions for their home lending practices, which could bring $30 million to the state, plus $100 million to $200 million to Oregon homeowners facing foreclosure or who are 'under water' on their mortgages.
A tentative legal settlement between the states and banks still must be approved by a federal judge. However, Oregon Attorney General John Kroger released a statement Wednesday explaining terms of the deal.
'This agreement penalizes banks that engaged in wrongful foreclosure practices and brings badly needed relief for distressed homeowners,' Kroger stated in a prepared release. '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.'
The agreement also requires tough new loan servicing standards that will protect homeowners from unfair and unscrupulous practices, Kroger said.
The deal does not preclude Oregon from proceeding with other multistate or independent investigations of illegal mortgage securitization and other industry practices that precipitated the housing crisis and the Great Recession.
Homeowners facing foreclosure can get updates on the litigation at oregonattorneygeneral.gov/homeowners. Frequently asked questions can be found at doj.state.or.us/homeowners/faqs.shtml.