SACRAMENTO, Calif. (Legal Newsline) - A senior Democrat on a U.S. House committee says he supports California Attorney General Kamala Harris' decision to reject a rumored $25 billion deal with the nation's top mortgage servicers.
California's George Miller, who serves on the House Committee on Education and the Workforce, told a Southern California radio news station that he agrees with Harris.
Last week, Harris rejected the latest proposed settlement with the banks, calling it "inadequate."
Miller, who represents California's 7th Congressional District, told KPCC that the nationwide talks aren't in the state's best interest and that the details of the deal need to be made more public.
"Whatever settlement they have has to go out to the public for a week, for a period of time, where it can be commented on because this represents the largest decisions about people's homes, their equity, their assets and their worth," he told the station.
The newest deal 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.
However, the settlement would cover only those mortgages held by the five banks -- Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp. -- not those held by Fannie Mae or Freddie Mac.
Harris, who stepped away from negotiations in September, said the newest version of the deal was still too lenient, providing too much protection for financial institutions, and would prevent the State from taking legal action against the banks.
According to Bloomberg, the attorney general wants a broader investigation of the lenders' mortgage practices to be conducted, including securitization.
Without California, though, the deal could decrease by as much as $6 billion.
Talks between the state attorneys general, federal officials and the five banks have dragged on for months now.
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.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.
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