California Attorney-General Kamala D. Harris addresses the media with Nevada Attorney General Catherine Cortez Masto by her side. (Photo by Jason Lewis)
They have teamed and formed an alliance to go after big banks for their role in the rash of foreclosures around the nation.
By Jason Lewis
Sentinel Staff Writer
California and Nevada are the two of the hardest hit states in the economic downturn, which caused the value of homes across the nation to drop. The results were California having the second highest foreclosure rate in the nation. The highest is in Nevada.
California Attorney-General Kamala D. Harris has partnered with Nevada Attorney General Catherine Cortez Masto in investigations into the mortgage crisis that has forced many residents of the two states out of their homes. The two will combine resources and share information in various mortgage fraud probes that each are heading.
“California and Nevada were particularly hard-hit as it relates to the foreclosure aspect and to the number of homeowners that we have underwater,” Harris said. “In that way, we have a very specific issue in terms of the harm that has resulted to our states – and also a focus for our investigations.”
Harris is leading investigations against mortgage firms such as Fannie Mae and Freddie Mac, while Masto has investigated two Southern California title officers for “robo-signing” schemes. The title officers signed and filed thousands of fraudulent foreclosure documents in Nevada.
“What we also know is that the investigations and our actions relate not only to these institutions who commit wrongdoing but also the predators that have evolved around the distress and the crisis,” Harris said. “We have seen other scams that have involved brokers and lawyers and others who are taking advantage of distressed homeowners who are simply trying to do everything and anything they can to keep their homes.”
Harris’ office is also investigating Bank of American Corp. and its mortgage arm Countrywide Financial, as well as Citibank. Nevada has also sued Bank of America and Countrywide.
U.S. banks and attorneys-general from around the nation have been in negotiations for over a year over fraudulent foreclosure practices that led to the rash of foreclosures. A settlement would be worth as much as $25 billion for the states, with a provision that would write down principal for troubled borrowers.
The Obama administration has sought a quick settlement that would give the housing market a boost, but that has not happened.
California will not agree to a settlement that state and federal officials have in the works. State officials believe that the proposed settlement will allow the banks to get off too easy for their wrong doings.
“We believe there must be accountability and consequence associated with this crisis,” Harris said. “We also believe that there must be meaningful relief for those involved in foreclosure and modification. And finally, this must be about reform so that whatever has happened will never happen again.”
Masto added, “”This crisis is causing great havoc in the local economy. Families are being forced out of their homes – vacant homes are being vandalized.”
Major banks suspended foreclosures in October of 2010 after investigations found deceptive foreclosure practices by banks. The settlement is thought to be the largest overhaul of an industry since the tobacco settlement of 1998.
California and Nevada are not the only states that are unhappy with the proposed settlements. New York, Delaware, Kentucky and Minnesota are not pleased, and New York and Delaware have partnered together to investigate Wall Street’s role in the mortgage crisis.