Kamala Harris a key player in settlement over mortgage crisis
The importance placed on California puts the state attorney general in a significant position to hold banks accountable for improper foreclosures.
California Atty. Gen. Kamala Harris, shown in November, has been under increased pressure from advocates who say she has not done enough to battle banks’ efforts to get off lightly. (Photo by Brian van der Brug, Los Angeles Times / September 24, 2011) |
Copyright © 2011, Los Angeles Times
Reporting from New York and Los Angeles—
California Atty. Gen. Kamala Harris has emerged as a key player in pursuing a nationwide settlement with major U.S. banks accused of wrongful foreclosures and is facing increased pressure from consumer groups seeking help for homeowners devastated by the mortgage crisis.
Harris, who was in closed-door talks with banks Friday, has been negotiating with the five largest mortgage servicers for months as part of a coalition of attorneys general and federal agencies seeking to a hammer out a deal surrounding allegations that banks committed widespread foreclosure errors.
Those involved in the talks see Harris' involvement in any settlement as crucial because of California's size and because so many home repossessions are concentrated in the Golden State.
The importance placed on California puts Harris in a significant position to hold banks accountable for improper foreclosures. She has been the subject of increased pressure from advocates who say she has not done enough to battle banks' efforts to get off lightly.
"The banks want to get away with everything, and she is probably one of the linchpins in saying that 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."
The progressive group Credo sent out a message to its supporters Thursday asking them to tell Harris to speak up more forcefully and reject a previously proposed settlement that would reportedly allow the banks some immunity from further investigation.
This echoed an earlier petition circulated by the liberal advocacy group MoveOn, and came after the Los Angeles County Federation of Labor passed a resolution this week stating that Harris should reject the previously proposed settlements.
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.
The efforts to pressure Harris go to the core of a growing disagreement among law enforcement officials nationwide about the best way to pursue banks for their role in the meltdown.
The settlement being wrangled over in Washington on Friday was originally negotiated by a committee representing all 50 states to deal with so-called robo-signing, the practice of bank employees signing sworn documents without reading or understanding them.
However, New York Atty. Gen. Eric Schneiderman, who was originally part of the negotiations, has launched his own investigation of the banks' practices before the crisis. He is focusing on the institutions' efforts to bundle low-quality mortgages into sophisticated bonds.
Schneiderman has grown increasingly critical of the 50-state settlement and expressed concern that his counterparts in other states may let the banks off too lightly and provide immunity from other efforts to bring them to account for mortgage misdeeds.
The head of the 50-state committee, Iowa Atty. Gen. Tom Miller, has said that a settlement would not limit further investigations and that any release from further legal claims would not be overly broad.
"We have conveyed to the banks and we have stated publicly that we will not release all civil liability," Geoff Greenwood, a spokesman for Miller, said in an emailed statement. "Indeed, the release of civil liability will be limited."
Miller removed Schneiderman from the committee in August, saying that he had "actively worked to undermine the negotiations."
Schneiderman has won support from attorneys general in Delaware, Nevada, Massachusetts and Minnesota, some of whom have launched their own investigations.
On Thursday, Kentucky Atty. Gen. Jack Conway announced his support for Schneiderman and his opposition to any immunity for the banks. In a letter to supporters he wrote, "Frankly, all elected leaders owe it to their constituents to take this position."
The Progressive Change Campaign Committee sent Conway's message to California residents Thursday, urging them to sign a petition urging Harris and other elected officials to take a stand. That echoed an email blast sent by MoveOn last week, asking its members to contact Harris and urge her to stand with Schneiderman.
"We are hoping that Kamala Harris comes along and says that California homeowners were harmed by these banks and that we are not going to let them get away with a slap on the wrist," said Daniel Mintz, a MoveOn representative in California.
Harris has generally resisted committing to any position among the sparring parties.
Harris met with Schneiderman in July and at that point told The Times that she was considering joining his investigation, but she has not done so.
In May, Harris announced the creation of a 25-person task force to look at mortgage fraud. In August she subpoenaed Citigroup Inc. and its banking subsidiary, Citibank, ordering them 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.
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, who was in closed-door talks with banks Friday, has been negotiating with the five largest mortgage servicers for months as part of a coalition of attorneys general and federal agencies seeking to a hammer out a deal surrounding allegations that banks committed widespread foreclosure errors.
Those involved in the talks see Harris' involvement in any settlement as crucial because of California's size and because so many home repossessions are concentrated in the Golden State.
The importance placed on California puts Harris in a significant position to hold banks accountable for improper foreclosures. She has been the subject of increased pressure from advocates who say she has not done enough to battle banks' efforts to get off lightly.
"The banks want to get away with everything, and she is probably one of the linchpins in saying that 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."
The progressive group Credo sent out a message to its supporters Thursday asking them to tell Harris to speak up more forcefully and reject a previously proposed settlement that would reportedly allow the banks some immunity from further investigation.
This echoed an earlier petition circulated by the liberal advocacy group MoveOn, and came after the Los Angeles County Federation of Labor passed a resolution this week stating that Harris should reject the previously proposed settlements.
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.
The efforts to pressure Harris go to the core of a growing disagreement among law enforcement officials nationwide about the best way to pursue banks for their role in the meltdown.
The settlement being wrangled over in Washington on Friday was originally negotiated by a committee representing all 50 states to deal with so-called robo-signing, the practice of bank employees signing sworn documents without reading or understanding them.
However, New York Atty. Gen. Eric Schneiderman, who was originally part of the negotiations, has launched his own investigation of the banks' practices before the crisis. He is focusing on the institutions' efforts to bundle low-quality mortgages into sophisticated bonds.
Schneiderman has grown increasingly critical of the 50-state settlement and expressed concern that his counterparts in other states may let the banks off too lightly and provide immunity from other efforts to bring them to account for mortgage misdeeds.
The head of the 50-state committee, Iowa Atty. Gen. Tom Miller, has said that a settlement would not limit further investigations and that any release from further legal claims would not be overly broad.
"We have conveyed to the banks and we have stated publicly that we will not release all civil liability," Geoff Greenwood, a spokesman for Miller, said in an emailed statement. "Indeed, the release of civil liability will be limited."
Miller removed Schneiderman from the committee in August, saying that he had "actively worked to undermine the negotiations."
Schneiderman has won support from attorneys general in Delaware, Nevada, Massachusetts and Minnesota, some of whom have launched their own investigations.
On Thursday, Kentucky Atty. Gen. Jack Conway announced his support for Schneiderman and his opposition to any immunity for the banks. In a letter to supporters he wrote, "Frankly, all elected leaders owe it to their constituents to take this position."
The Progressive Change Campaign Committee sent Conway's message to California residents Thursday, urging them to sign a petition urging Harris and other elected officials to take a stand. That echoed an email blast sent by MoveOn last week, asking its members to contact Harris and urge her to stand with Schneiderman.
"We are hoping that Kamala Harris comes along and says that California homeowners were harmed by these banks and that we are not going to let them get away with a slap on the wrist," said Daniel Mintz, a MoveOn representative in California.
Harris has generally resisted committing to any position among the sparring parties.
Harris met with Schneiderman in July and at that point told The Times that she was considering joining his investigation, but she has not done so.
In May, Harris announced the creation of a 25-person task force to look at mortgage fraud. In August she subpoenaed Citigroup Inc. and its banking subsidiary, Citibank, ordering them 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.
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.
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