Harris calls for head of federal agency to 'step aside'

Jessica M. Karmasek Nov. 7, 2011, 10:00am


SACRAMENTO, Calif. (Legal Newsline) - California Attorney General Kamala Harris, who has exited nationwide mortgage settlement talks, is now telling the head of a federal agency that oversees Fannie Mae and Freddie Mac to "step aside" if he won't help homeowners.

Harris is putting pressure on Edward DeMarco, the acting director of the Federal Housing Finance Agency, for continuing to refuse to lower mortgage loans for troubled homeowners, according to the Huffington Post.

"It has become clear to me that the only way to keep distressed California homeowners in their homes is through meaningful principal reduction," Harris said in a statement Thursday, according to the Post.

Fannie Mae and Freddie Mac -- despite owning an ample chunk of the mortgage debt in the country -- are not part of the ongoing settlement talks with Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America.

In September, Harris backed out of the talks with the nation's top mortgage servicers.

In a letter to Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller, who is heading up the talks, she called the rumored $20 billion deal "inadequate" for homeowners, saying it provided too much protection for financial institutions.

"After much consideration, I have concluded that this is not the deal California homeowners have been waiting for," the attorney general wrote.

"(The) relief contemplated would allow too few California homeowners to stay in their homes."

The probe began last October with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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