The multistate attorneys general group working toward a foreclosure settlement with the nation's biggest banks suffered a blow Friday, when California's Kamala Harris announced her departure from negotiations.
Harris notified Iowa Attorney General Tom Miller and U.S. Associate Attorney General Thomas Perrelli of her decision in a letter that was obtained and published by the New York Times Friday. According to the letter, Harris is exiting the talks because she opposes the broad scope of the settlement terms under discussion.
‘Last week, I went to Washington, D.C., in hopes of moving our discussions forward,’ Harris wrote. ‘But it became clear to me that California was being asked for a broader release of claims than we can accept and to excuse conduct that has not been adequately investigated.’
"[T]his not the deal California homeowners have been waiting for," Harris adds one line later.
Harris, who earlier this year launched a mortgage fraud task force, says she will continue investigating mortgage practices – including banks' bubble-era securitization activities – independent of the multistate group.
‘I am committed to doing as thorough an investigation as is needed – and to taking the time that is necessary – to set the stage for achieving appropriate accountability for misconduct,’ she wrote.
Harris also told Miller and Perrelli that she intends to advocate for legislation and regulations that increase transparency in the mortgage markets and "eliminate incentives to disregard borrowers' rights in foreclosure."
Harris' departure is considered significant given the high number of distressed loans in California. In August, approximately one in every 226 housing units in the state had a foreclosure filing of some kind, according to RealtyTrac data.