SACRAMENTO, Calif. (Legal Newsline) - California Attorney General Kamala Harris has reportedly rejected a proposed settlement with the nation's top mortgage servicers.
The Sacramento Bee reported Wednesday that Harris thought the latest proposed deal, rumored to be worth $25 billion, was again "inadequate."
"At this point, this deal does not suffice for California," Shum Preston, a spokesman for the attorney general, told the Bee.
For months, state attorneys general and various federal officials have been in talks with five banks over their mortgage foreclosure practices, including Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp.
The probe began in October 2010 with inquiries into so-called "robosigning" practices, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.
The newest proposed settlement, which would cover only those mortgages held by the five banks, is said to lower nearly 1 million homeowners' mortgages by about $20,000 and provide for payments of $1,800 to those harmed by the banks' lending practices.
Earlier this week, it was reported that the deal would decrease by $6 billion if Harris did not sign on.
The attorney general stepped away from the nationwide talks in September.
In a letter to Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller -- who is heading up the talks -- Harris argued at the time that the settlement provided too much protection for financial institutions.
The newest version, her office told the Bee, was still too lenient and would prevent the State from taking legal action against lenders.
Meanwhile, New York Attorney General Eric Schneiderman is remaining mum on whether he will join the settlement.
"My concern with that has always been to make sure that we're not releasing claims that obviously now are even more important to me because I'm investigating them," he told reporters, according to Reuters.
In August, Schneiderman was removed from an executive committee negotiating the nationwide foreclosure settlement for "actively" working to "undermine" its effort.
Since then, he -- along with Harris, Delaware's Beau Biden and Nevada's Catherine Cortez Masto -- has started his own comprehensive investigation.
This week, the New York attorney general was selected by President Barack Obama to co-chair a national mortgage crisis unit aimed at investigating home lending by banks.
The unit is designed to focus on those actions that created the financial crisis, not the abuses that occurred after, he explained.
From Legal Newsline: Reach Jessica Karmasek by email at firstname.lastname@example.org.
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