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California and Nevada AGs Join Forces For Independent Investigation of Foreclosure Fraud

December 23, 2011

Our Ontario foreclosure defense lawyers were pleased to see a recent announcement that California and Nevada will jointly investigate banks' fraud and wrongdoing during the foreclosure crisis. At Howard Law, P.C., we recently noted that our own state Attorney General, Kamala Harris, has broken away from the multistate negotiations with the banking industry to settle the "robo-signing" controversy of late 2010. Those talks had been focused on the revelation that banks had a widespread practice of signing legal affidavits without knowing whether they were accurate, which was at best a violation of legal procedures. At worst, the "robo-signed" documents could have allowed wrongful foreclosures to take place. Many courts responded by temporarily stopping foreclosures altogether, or putting stricter rules in place for foreclosure litigants.

Harris said in late September that she was leaving the robo-signing talks because she felt they were not offering sufficient remedies for the scope of the foreclosure crisis. The multistate group has taken several blows, including the departure of attorneys general from both liberal and conservative states and a federal settlement that critics said could undermine the AGs' talks. Harris and other more liberal AGs felt that the talks were an opportunity to discuss remedies that might curb foreclosures and the suffering they cause for both foreclosed borrowers and government agencies. Observers said the alliance between Harris and Nevada AG Catherine Cortez Mastro could further undermine those talks. However, they join AGs in several other states that have taken individual action, including New York and Massachusetts, which sued several lenders in early December for alleged irregularities in foreclosures.

The partnership between California and Nevada combines two neighboring states that were both hit hard in the foreclosure crisis. They are also both non-judicial foreclosure states, which means evidence of fraud will be less obvious than the fraudulent affidavits submitted in judicial foreclosure states. Their announcement said they will share litigation strategies, evidence and perhaps personnel between offices. Each has been busy on her own foreclosure investigations. In Nevada, Masto has widened an investigation of Lender Processing Services, a Florida foreclosure firm accused of robo-signing; Harris is also investigating the firm. Masto is suing Bank of America and its Countrywide division, accusing them of reneging on a settlement of an earlier predatory lending case, and Harris is investigating Bank of America, along with Citibank, Fannie Mae and Freddie Mac, for other reasons.

The Anaheim foreclosure defense attorneys at Howard Law, P.C., are pleased to see this partnership. California has major weight, as partner Vincent Howard has noted in earlier blog posts, because we have the most people of any state and a lot of economic importance. Adding Nevada to our independent investigations only adds more weight to any litigation that might eventually come out of the work, and Nevada is hard-hit in its own right. Unfortunately, we agree with Harris that the 50-state settlement talks were toothless; they dragged on for more than a year and were undermined from within and without. Given the actual criminal conduct at issue here -- and the grave effects on the lives and finances of ordinary borrowers -- our Pomona foreclosure defense lawyers do not feel it is unreasonable of the AGs to push for real penalties.

Howard Law, P.C., represents clients across California who are fighting to hold on to their homes, despite indifference and mixed messages from their loan servicers. To tell us about your case and learn more about your options, please call us toll-free at 1-800-72-5925 or send us an email today.

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