Foreclosuregate Update: California AG rejects settlement

Posted by AzBlueMeanie:

The fiftyforty-five state settlement negotiations between the states attorneys general, the Justice Department and the banksters of Wall Street may be finally, irrevocably off the table. The whitewash settlement for mere pennies on the trillions of dollars stolen by the banksters of Wall Street in securitized mortgage fraud in the casino capitalism of Wall Street coupled with a promise of immunity from further legal liability is an affront to justice and the rule of law. It's time that "somebody's going to emergency, somebody's going to jail."

David Dayen sums it up well at Fire Dog Lake. California AG Kamala Harris Rejects Foreclosure Fraud Settlement:

In a major development, California’s Attorney General, Kamala Harris, has broken off from the proposed 50-state settlement over foreclosure fraud. If the talks weren’t dead already, and if you’ve read this space you’d know that I think they were, this surely puts them to bed.

California Atty. Gen. Kamala Harris will no longer take part in a national foreclosure probe of some of the nation’s biggest banks, which are accused of pervasive misconduct in dealing with troubled homeowners.

Harris removed herself from talks by a coalition of state attorneys general and federal agencies investigating abusive foreclosure practices because the nation’s five largest mortgage servicers were not offering California homeowners relief commensurate to what people in the state had suffered, a person familiar with the matter said.

The big banks were also demanding to be granted overly broad immunity from legal claims that could potentially derail further investigations into Wall Street’s role in the mortgage meltdown, the person said.

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Harris’ full letter to Thomas Perrelli of the Justice Department and Iowa AG Tom Miller is here. As far as where she goes from here, she writes:

I intend to continue to investigate the mortgage practices that I believe have contributed to the growing housing crisis in my state. Months ago, I began California’s independent work in this respect by establishing a Mortgage Fraud Strike Force, and I have given the Strike Force attorneys a broad mandate to investigate all stages of the mortgage lending process, from origination to servicing and foreclosures to securitization of loans into investments in the secondary market. I am committed to doing as thorough an investigation as is needed – and to taking the time that is necessary – to set the stage for achieving appropriate accountability for misconduct.

I will also push for additional legislation and regulations that enhance transparency and eliminate incentives to disregard borrower’s rights in foreclosure. Many of these reforms have been identified in the multistate talks, and I hope that in good faith the banks will adopt these reforms immediately.

Fat chance of that. But overall, this is a great pledge to seriously investigate the banks on a wide range of mortgage and foreclosure issues, and to seek the appropriate remedies. Bravo to Harris, and that comes from a constituent.

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As for Tom Miller, his dream of getting the banks off the hook for their crimes is dead and buried. Without California and New York, you’re not going to be able to have a settlement that means anything. He’s probably looking for a way out right now.

The investigations have to be followed through. But this is a victory so far for accountability and against the whitewashes that have characterized the nation’s response to systemic fraud in an increasing and troubling fashion over the past several years.

It's good to see that there are still state attorneys general who believe in pursuing white collar crime and not whitewashing or covering up the crimes of the privileged wealthy class. Now they have to follow-up with actual prosecutions and real jail time.