EnlargeRich Pedroncelli/AP
California Attorney General Kamala Harris, seen in June, said she will not agree to a settlement over foreclosure abuses being negotiated with major U.S. banks by other state and federal attorneys general.
California Attorney General Kamala Harris
said Friday that she will not agree to a
settlement over foreclosure abuses that
federal officials and other state attorneys
general are negotiating with major U.S. banks.
said Friday that she will not agree to a
settlement over foreclosure abuses that
federal officials and other state attorneys
general are negotiating with major U.S. banks.
Her announcement is the latest to undermine
a settlement that had been in the works between
the banks and attorneys general in all 50 states.
Other states including New York also have
expressed reservations.
a settlement that had been in the works between
the banks and attorneys general in all 50 states.
Other states including New York also have
expressed reservations.
The agreement was supposed to settle claims
of poor mortgage and foreclosure practices,
including document fraud known as
"robo-signing" approving documents in
foreclosures without actually reading them.
of poor mortgage and foreclosure practices,
including document fraud known as
"robo-signing" approving documents in
foreclosures without actually reading them.
However, Harris said the pending deal is
"inadequate for California homeowners" and gives bank
officials too much legal immunity.
"inadequate for California homeowners" and gives bank
officials too much legal immunity.
The state is being asked as part of the settlement "to excuse conduct that has not been properly
investigated," she wrote, promising to continue her own investigation.
investigated," she wrote, promising to continue her own investigation.
Without agreement from the nation's most populous state — and one of the hardest hit by
foreclosures — the settlement could end up doing little to resolve the issue. Foreclosure fraud
class-action lawsuits are also piling up against major banks across the country.
foreclosures — the settlement could end up doing little to resolve the issue. Foreclosure fraud
class-action lawsuits are also piling up against major banks across the country.
Harris noted that more than 2.2 million California residents are underwater, meaning they owe
more on their mortgages than their homes are worth. Since negotiations began 11 months ago,
foreclosures have begun against more than 560,000 additional California homes.
more on their mortgages than their homes are worth. Since negotiations began 11 months ago,
foreclosures have begun against more than 560,000 additional California homes.
"No state has been harder hit than my home state of California," Harris wrote in a letter to
Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller,
who have been leading the talks. "Recently, at the same time that we have been negotiating in
good faith, foreclosures in California have surged again."
Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller,
who have been leading the talks. "Recently, at the same time that we have been negotiating in
good faith, foreclosures in California have surged again."
At the same
time that we
have been
negotiating in
good faith,
foreclosures
in California
have surged
again.
time that we
have been
negotiating in
good faith,
foreclosures
in California
have surged
again.
Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. are among the banks that have been involved in the talks to compensate borrowers whose homes were improperly foreclosed upon.
JPMorgan Chase spokesman Thomas Kelly and a Bank of America representative declined to comment on Harris' letter. A Wells Fargo representative did not immediately return a call seeking comment.
Harris said California will go it alone in negotiating a settlement with the banks that would keep more families in their homes. She also promised to seek regulations and legislation to prevent future problems.
Assistant Iowa Attorney General Patrick Madigan said California had been an important part
of the negotiations, which already have had lasting effects, delaying foreclosures in many
states.
of the negotiations, which already have had lasting effects, delaying foreclosures in many
states.
"However, the multistate effort is pressing forward and we fully expect
to reach a settlement with the banks," he said in a statement. The
settlement will still be presented to all 50 states, he said.
to reach a settlement with the banks," he said in a statement. The
settlement will still be presented to all 50 states, he said.
States need to move quickly to prevent more foreclosures, Madigan
said.
said.
"Providing relief after the foreclosure crisis is over would be a hollow
victory indeed," he warned.
victory indeed," he warned.
Community organizations praised Harris for rejecting the settlement.
"The first step in restarting our economy is keeping people in their
houses and holding banks' feet to the fire," Rick Jacobs, chairman and
founder of the Courage Campaign, said in a written statement.
houses and holding banks' feet to the fire," Rick Jacobs, chairman and
founder of the Courage Campaign, said in a written statement.
"This settlement would have only been able to help around 20,000 California
homeowners out of 2.2 million, while giving away all future rights to pursue
investigations and litigation around a broad list of fraud that has been committed,"
said a news release from People Improving Communities Through Organizing.
homeowners out of 2.2 million, while giving away all future rights to pursue
investigations and litigation around a broad list of fraud that has been committed,"
said a news release from People Improving Communities Through Organizing.
Banks' responses to the scrutiny have varied.
Many, including Bank of America and Ally Financial Inc.'s GMAC Mortgage,
temporarily halted their foreclosure cases in October after allegations surfaced that
employees signed but didn't read documents that may have contained errors.
Wells Fargo also admitted it had made mistakes in thousands of foreclosure cases
and promised to fix them but did not stop its foreclosures. All three lenders have
said they're fixing the problems.
temporarily halted their foreclosure cases in October after allegations surfaced that
employees signed but didn't read documents that may have contained errors.
Wells Fargo also admitted it had made mistakes in thousands of foreclosure cases
and promised to fix them but did not stop its foreclosures. All three lenders have
said they're fixing the problems.
One of the biggest sticking points in settlement talks has been the amount of penalties
the mortgage lenders would pay for their role in improper foreclosures. Federal and
state officials have sought a figure greater than $20 billion while banks have pushed
for about $5 billion.
the mortgage lenders would pay for their role in improper foreclosures. Federal and
state officials have sought a figure greater than $20 billion while banks have pushed
for about $5 billion.
A "monetary relief fund" was agreed upon in principle by May. But the formula for how
much states and federal agencies would get became contentious.
much states and federal agencies would get became contentious.
Some states, upset with the slow movement on the settlement, have already taken action on
their own.
their own.
New York's attorney general, Eric Schneiderman, was removed from an executive committee
of 14 state officials in August after refusing to agree to an across-the-board immunity clause
for banks.
of 14 state officials in August after refusing to agree to an across-the-board immunity clause
for banks.
Attorneys general in Arizona and Nevada, two of the states hardest hit by defaulted
mortgages, have filed lawsuits against Bank of America, the country's largest bank,
saying the lender misled and deceived homeowners who have tried to modify mortgages.
mortgages, have filed lawsuits against Bank of America, the country's largest bank,
saying the lender misled and deceived homeowners who have tried to modify mortgages.
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"We loVe out customers.
We privatize our profits.
We socialize our losses!"
Should we add this: We are job creators....
The new American way.
so we dont know how much is a good nest egg right now...wish I was small minded enough to sit around and pray for help like you folks seem to find peace in...but god is like drugs.....reality calls....good luck...
Be careful for what you wish for - in the case of Bank of America, if the states start fighting back and BofA is sued, guess what will happen? All of us will pay MORE for mortgages. Look what they're doing to debit card holders! Sure, 'it's only $5/mo' but what's next?
stop Paying ///
move to a credit Union
or theres always Wal mart money cards 3.00 a month total fees
How does that relate to this? On the PBS Newshour, I just watched a bank spokesman defend the banking industry's right to their current profit margin regarding Bank of America's announcement that they will begin charging a per purchase fee for all purchases made with their debit cards. And the spokesman seemed to be seriously angry at the Fed and certain members of Congress for imposing this regulation on them, as though it was completely unfair. You'd think they would be acting sheepish after taking the whole nation to the cleaners to bail them out of their profiteering. But no, they obviously think they're entitled to their greediness.
So that's why I believe in God. These people already have more than they possibly can use in one lifetime, yet they want more.