SACRAMENTO, Calif. (Legal Newsline) - California Attorney General Kamala Harris has reportedly subpoenaed Bank of America Corp. over risky mortgage-backed investments it allegedly sold.
According to the Los Angeles Times, the subpoenas were served Tuesday.
A source close to the probe told the Times the attorney general is trying to determine if Bank of America and Countrywide Financial Corp., now owned by the bank, sold the investments to institutional and private investors in the state under false pretenses.
Harris recently backed out of ongoing settlement talks with the nation's top mortgage servicers, including Bank of America.
In September, she sent a letter to Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller, who is heading up the talks.
Harris called the proposed deal "inadequate" for homeowners, saying it provided to 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."
State attorneys general, the U.S. Justice Department, Treasury Department and the new Consumer Financial Protection Bureau are in the midst of negotiating a deal with mortgage servicers Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America.
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.
Some say Harris' move to go it alone, along with this week's subpoenas, could mean the attorney general is conducting her own investigation of the mortgage servicers.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.
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