The nation’s most populous state has decided to reject the Obama administration’s proposed settlement with large banks over their handling of mortgage foreclosures.

 

California’s state attorney general, Kamala Harris, said this week that a proposed settlement between her legal counterparts in other states, the Obama administration and several national banks is “inadequate” and “not the deal California homeowners have been waiting for.”

 

The deal would settle lawsuits filed over improper foreclosure practices employed by Bank of America, Wells Fargo, JPMorgan Chase and other institutions. What has upset Harris and other attorneys general, including Eric Schneidrman of New York, unhappy with the direction of negotiations, is the insistence by banks—and the Obama administration— that they receive a broad legal waiver that frees them from future litigation stemming from mortgage troubles and the creation of mortgage securities before the financial crisis.

 

Harris is conducting her own investigation into the creation and sale of mortgage securities, and it refusing to give up possible legal action against banks just to settle the foreclosure controversies.

-Noel Brinkerhoff

 

California Quits States’ Talks With Banks on Mortgages (by Louise Story, New York Times)

Obama Administration Fights to Halt Bank Investigations by States (by Noel Brinkerhoff, AllGov)