LOS ANGELES (Legal Newsline) - California Attorney General Kamala Harris and her colleague in Nevada, Catherine Cortez Masto, have begun a joint investigation into misconduct and fraud in the mortgage industry.
Earlier this year, Harris withdrew her support for a nationwide settlement being negotiated between Iowa Attorney General Tom Miller and top mortgage servicers like Wells Fargo, JPMorgan Chase, Citigroup, Ally Financial and Bank of America. Masto had also expressed concern with the process in August.
The two are combining civil and criminal investigations.
"The mortgage crisis is a law enforcement matter, and we will prosecute to hold accountable those who are responsible and also protect the homeowners who are targeted for fraud," Harris said.
"I am delighted that California and Nevada are entering into this alliance to leverage the best results for our investigations and look forward to forging similar collaboration with other states."
State attorneys general, the U.S. Justice Department, Treasury Department and the new federal Consumer Financial Protection Bureau are in the midst of negotiating a settlement with the five mortgage servicers.
The mortgage foreclosure probe began in October 2010 with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.
Harris and Masto say their states have been the hardest hit by the foreclosure crisis by most objective measures. In both states, banks can foreclosure on a home without court oversight.
Masto created a Mortgage Fraud Strike Force in 2007, and Harris did the same in May.
In November, Masto announced a grand jury had indicted two title officers over an alleged robosigning scheme. Masto alleged Gerri Sheppard and Garry Trafford filed tens of thousands of fraudulent documents while employed at Lender Processing Services.
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.