Oklahoma AG Pursuing Own Settlement with Servicers

State attorneys general have not only lost the collaboration of federal regulators in their effort to craft a universal settlement with servicers to resolve issues exposed by recent robo-signing investigations, but individual counsels are falling from their own ranks.

[IMAGE]

Oklahoma Attorney General ""Scott Pruitt"":http://www.oag.state.ok.us/ is reportedly breaking from the group to pursue his own agreement with mortgage servicers.

_Bloomberg_ says Pruitt has instructed his staff to work on a settlement that is specific to Oklahoma's concerns.

[COLUMN_BREAK]

""This alternative to the current proposed term sheet could provide other states with a model to consider,"" Pruitt's office told the news agency.

Federal regulatory agencies issued ""their own enforcement actions"":http://dsnews.comarticles/regulators-hand-down-enforcement-actions-to-servicers-and-their-vendors-2011-04-13 to 14 mortgage servicers, as well as Lender Processing Services (LPS) and the Mortgage Electronic Registration Systems, Inc. (MERS) last week.

Attorneys general were not part of last week’s consent orders and said at the time that they were pressing forward with their own settlement agreements.

But there’s been strong dissension within the fold surrounding ""the 27-page term sheet"":http://dsnews.comarticles/details-of-foreclosure-settlement-surface-resolution-still-long-way-away-2011-03-08 that was submitted to servicers in early March to serve as a springboard for the discussions, particularly around the issue of principal write-downs.

Attorneys general from Virginia, Texas, Florida, and South Carolina sent a letter to Iowa AG Tom Miller, who is leading the states’ negotiations, voicing their opposition to the principal reduction provision.

""Pruitt has also spoken out"":http://dsnews.comarticles/more-servicers-some-attorneys-general-speaking-out-against-principal-write-downs-2011-03-14 against including principal write-downs in the settlement agreement, noting that such a mandate would force servicers to violate obligations to their investors.