Attorney General Kamala Harris is a key player in the nationwide settlement with major U.S. Banks now that Attorney General Schneiderman has been removed from the negotiations.
California is one of the most powerful states, and as one of the states hardest hit by foreclosure, California’s Attorney General is in a significant position to hold banks accountable. Harris has stated publicly that principle reduction has to be on the table. Harris has been negotiating with the five largest mortgage servicers for months with a coalition of attorneys general across the nation dealing with allegations of fraud, misrepresentation and securitization of mortgages.
Harris, who was in closed-door talks with banks Friday, has been under increasing pressure from grass-root organizations that feel she is not doing enough to forestall the banks efforts to get off the hook.
“The banks want to get away with everything, and she is probably one of the linchpins in saying what is going to happen or isn’t going to happen,” said Liz Ryan Murray, the chairwoman of the foreclosure task force at Americans for Financial Reform. “We would like to see her come forward and be more public on what she will and won’t give up.”
Advocacy group MoveOn.org, and the Los Angeles County Federation of Labor passed a resolution this week stating that Harris should reject the previously proposed settlements. Harris met with local organizations in August to hear their concerns and activists believe she is listening. PICO California, an advocacy group for homeowners, has said that Harris appears to be pursuing the best for Californians but is not being clear enough about where she stands. “We think she could more strongly relate her core principals around this settlement,” said Brian Heller de Leon, a representative for the group.
Harris’ office declined to comment on the specifics of the negotiations, but a spokesman said her main goal in any settlement would be to provide the maximum amount of relief for California homeowners.
“That means listening keenly to what the California public has to say on this issue, and rigorously evaluating any settlement proposals,” said Shum Preston, the spokesman.
In May, Harris created a 25-person task force to look at mortgage fraud. In August she subpoenaed and ordered Citibank to answer questions regarding the selling and marketing of mortgage-backed securities. She has also subpoenaed a Florida firm that processes foreclosures for many of the nation’s major financial institutions, Lender Processing Services. From 2005 – 2008, most of the banks securitized their loans which mean they no longer own the notes. They are now merely the servicer and that position places many homeowners in the position of double jeopardy.
Meanwhile California leads in new foreclosure proceedings with a 55% increase in August over July, with Bank of America leading the pack. “Nobody really wants to be a leader in foreclosed properties but, for better or worse, that is what Bank of America is,” said Guy Cecala, publisher of Inside Mortgage Finance Publications.
Inland areas like Riverside and San Bernardino counties posted the biggest jumps at 68% for August.