The attorneys general from three states have publicly objected to a proposed settlement with Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial related to their mortgage servicing and documented foreclosure abuses including robosignatures.
Alabama’s Luther Strange, Oklahoma’s E. Scott Pruitt, Nebraska’s Jon Bruning wrote a letter to Attorney General Tom Miller who is leading the national mortgage servicing probe with their objections. The proposal completed earlier this month has been endorsed by the Treasury Department, the Housing and Urban Development department and the Consumer Financial Protection Bureau, but Oklahoma, Alabama and Nebraska claim that several elements of the proposal would “override state laws” and that forcing banks to reduce loan balances on mortgages to help struggling homeowners “goes too far” in many cases.
The letter states, “We have concerns … that what started out as an effort to correct specific practices harmful to consumers has morphed into an attempt to establish an overarching regulatory scheme that fundamentally restructures the mortgage loan industry.”
These three are not the only attorneys generals to have spoken out and others on both sides of the aisle have indicated they have plans to reject the proposal as well as many believe the settlement allows for the “overarching regulatory scheme” and goes too far.