Foreclosure - Pressure Being Placed on Attorney General of California

Foreclosure - Pressure Being Placed on Attorney General of California

The federal and state negotiators trying to come to a settlement with the five mega banks for foreclosure wrongdoings are anxious to get back Kamala Harris, the attorney general of California to their fold. Pressure is being placed on her to return to the settlement talks and agree to the deal amounting to $25 billion. >


Harris withdrew from the talks recently. Her contention was that there was very little of benefit in it for the residents of California while the banks would continue with their dubitable operations for years. It is four years since the bubble burst and now California is in the eye of the storm. The debate is about how to penalize the mortgage industry and give relief to the besieged house owners.

Harris and other critics contend that the settlement will give relief to only a small percentage of the 2 million who are now underwater in California. On the other hand the banks would be let off easily. Harris felt sufficient investigation has not been done to dig out the truth.

Those cobbling together the settlement content that new ground is being broken by telling the banks to write down the principal on underwater mortgages and asking them to agree to improve their operations. The entire thing would be done under court supervision.

California has been one of the worst hit states and if it opts out of the agreement then it will lose billion. But on the other hand a multi-state settlement sans California would be difficult. Tom Miller, the attorney general of Iowa who is the lead figure in settlement talks said they would go ahead without California.

Another dissenting figure about the proposed settlement, attorney general of Massachusetts, Martha Coakley, filed lawsuit against five of the mega banks.

There are however political risks for Harris who won by a slim majority last year. If she remains outside the settlement talks she will court the displeasure of White House. But if she returns to the fold then the progressives will be angry with her; these progressives were instrumental in her victory.

The investigations are charged with emotion and politics. Millions in California have either lost their homes to foreclosure or are being threatened by lost equity. Many are unable to modify their loans. Becky Bond of CREDO Action (political director) said, People want to see the banks held accountable (but) the Obama administration is putting enormous pressure on her.

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