Tag Archives: Attorney General

Ohio Attorney General Mike DeWine has filed a lawsuit against The Modification Group LLC, a Cleveland business that offered to help homeowners avoid foreclosure in exchange for upfront fees. The lawsuit alleges multiple violations of Ohio consumer law, including failure to deliver. The attorney general's office currently has 70 complaints against the company dating back to December 2009. DeWine is seeking civil penalties and full restitution for consumers.

State attorneys general are holding meetings with the nation's largest mortgage servicers this week to negotiate a settlement agreement for the robo-signing issues that surfaced last fall. The most controversial piece of the AGs initial proposal - mandated principal write-downs - has reportedly been dropped from the discussions. The primary issue now is the amount of fines to be levied, which the states want to use to help struggling homeowners avoid foreclosure.

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. Oklahoma Attorney General Scott Pruitt is reportedly breaking from the group to pursue his own agreement with mortgage servicers that specifically addresses his state's concerns.

Federal regulators split from state attorneys general last week to cut their own deal with mortgage servicers as part of a settlement for the robo-signing mess that surfaced last fall. Critics of the side deal are calling for federal regulators to withdraw their agreements and work with the states to hold banks accountable. But even in the attorney general camp there has been dissension. A study released Tuesday by three economists says the original settlement proposal backed by state counsels could increase the foreclosure inventory by $297 billion.

The Washington Attorney General's Office says it has uncovered another problem that jeopardizes homeowners' chances of stopping a foreclosure - difficulty contacting trustees. Washington law requires foreclosure trustees maintain offices in the state and local phone numbers, but officials have discovered that some of the largest trustees are not in compliance, making it difficult for borrowers to legitimately stop foreclosure actions.

Mortgage servicers have reportedly reached an agreement with federal regulators to change their foreclosure procedures as part of a settlement for the robo-signing transgressions that were uncovered last fall. The arrangement includes no fines, but monetary penalties have not been completely ruled out. In early March, federal regulatory agencies and state attorneys general together crafted a 27-page settlement proposal, however, the states have not been part of this latest development.

Servicers made several concessions in their version of the settlement proposal that they submitted to federal and state regulators. In an excerpt of the draft obtained by DS News, servicers agree to stop dual tracking, give borrowers a window to appeal a denied modification, and provide a single point of contact for borrowers. Perhaps most significant in the excerpt is a pledge by the servicers to establish standards for affidavits and sworn statements in foreclosure and bankruptcy proceedings.

Attorneys general and federal regulators sat down with major servicers this week to discuss the details of the robo-signing settlement. Both sides have submitted their own version of what they believe a settlement should look like, and this week's meeting is just the first in what will likely be a long period of negotiations. Banks have repeatedly spoken out against what they believe to be terms that are too harsh and may even encourage moral hazard. Mortgage investors are also weighing in on the proposed terms.

Ohioans undergoing foreclosure mediation who can't afford to hire an attorney now have another option. Capital University Law School recently developed a program to connect law students with people going through foreclosure. Upperclass law students volunteer their time for the pro bono program to help homeowners understand the mediation process.

Opposition to the proposed servicer settlement developed a stronger stance this week as four attorneys general released a letter to Iowa's Tom Miller, who is leading the states' investigation. Attorneys general from Virginia, Texas, Florida, and South Carolina said while they support actions to correct problems unearthed by the robo-signing scandal, the proposal includes mandates and suggestions that are out of the scope of their enforcement role. They expressed particular uneasiness over the provisions surrounding principal write-downs.