A decision on Friday by a California official to withdraw from negotiations with large banks over their mortgage practices threatens to derail a broad settlement that the Justice Department has been brokering for nearly a year.
The proposal being sought by the big banks “is not the deal California homeowners have been waiting for,” wrote Kamala D. Harris, the state attorney general, in a letter to those leading the talks. It is “inadequate,” she wrote.
California is among the states whose homeowners have suffered the most in the housing market collapse, and because of its size, officials involved in the negotiations said banks, including Bank of America, Wells Fargo and JPMorgan Chase, would want its participation before agreeing to settle and to pay substantial sums.
The talks have been led by the attorney general of Iowa as well as an associate attorney general at the Justice Department’s headquarters. The negotiations have evolved from disputes over so-called robo-signing and other improper foreclosure practices into a battle over nearly every aspect of the banks’ roles in the housing bubble and subsequent collapse.
If a deal were reached, it could provide billions of dollars for the Obama administration and states to distribute in assistance to homeowners, free banks from some of the mortgage claims that have caused their stocks to sputter, and score a victory for the Justice Department, which has been criticized for pursuing very few cases related to the financial crisis. A spokeswoman for the department said Friday evening that the negotiations would continue.
http://www.nytimes.com/2011/10/01/business/california-quits-states-talks-with-banks.html
The proposal being sought by the big banks “is not the deal California homeowners have been waiting for,” wrote Kamala D. Harris, the state attorney general, in a letter to those leading the talks. It is “inadequate,” she wrote.
California is among the states whose homeowners have suffered the most in the housing market collapse, and because of its size, officials involved in the negotiations said banks, including Bank of America, Wells Fargo and JPMorgan Chase, would want its participation before agreeing to settle and to pay substantial sums.
The talks have been led by the attorney general of Iowa as well as an associate attorney general at the Justice Department’s headquarters. The negotiations have evolved from disputes over so-called robo-signing and other improper foreclosure practices into a battle over nearly every aspect of the banks’ roles in the housing bubble and subsequent collapse.
If a deal were reached, it could provide billions of dollars for the Obama administration and states to distribute in assistance to homeowners, free banks from some of the mortgage claims that have caused their stocks to sputter, and score a victory for the Justice Department, which has been criticized for pursuing very few cases related to the financial crisis. A spokeswoman for the department said Friday evening that the negotiations would continue.
http://www.nytimes.com/2011/10/01/business/california-quits-states-talks-with-banks.html
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