Vincent Howard and our team of San Bernardino foreclosure defense attorneys have followed California's progress in the "robo-signing" settlement talks with great interest. Attorney General Kamala Harris has made waves in the past months by refusing to sign on to the national settlement, calling it inadequate to compensate Californians for the many losses they incurred in the housing crash. Indeed, she has launched her own investigations, including some in cooperation with Nevada. According to a Jan. 25 article from the Los Angeles Times, Harris and her team were invited back to negotiate by further concessions from lenders, but ultimately did not receive an offer they felt was sufficient. A spokesperson for Harris told the media that the settlement would prevent her and other AGs from pursuing their current outside investigations.
No deal has officially been reached, despite nearly 16 months of investigation and negotiation and the original participation of AGs from all 50 states and Washington, D.C. The investigation has been plagued by politics, with conservative AGs arguing that the settlement is too aggressive and liberal ones countering that it doesn't go far enough. In particular, AGs in New York, Delaware, California, Nevada and elsewhere have opted out or threatened to and started their own investigations into lending practices. Harris said in late September that the settlement offer at that time did not include enough remedies from the five major lenders for the foreclosure crisis. She and the other breakaway AGs said they'd prefer to see efforts to stop foreclosures and their negative effects, going beyond addressing the fallout from robo-signing itself. The current deal still is not transparent enough or sufficient to address Californians' needs, a spokesperson said.
California's participation in the talks is considered important to any settlement because the state is so big -- and has the resources to bring large lawsuits on its own. According to the article, the latest proposal includes a $17 billion program that would reduce principal on loans that are "underwater," or larger than the value of the home. Another $5 billion would be earmarked for people directly harmed by robo-signing and other bad servicing practices, and $3 billion would help underwater homeowners refinance at a rate of 5.25%. (Current rates for a 30-year prime mortgage are 4 to 4.5%.) In return, the AGs would agree to release lenders from actions for improper servicing or origination of mortgages -- a provision that Harris and some colleagues believe would stop their existing investigations. Delaware has filed a lawsuit alleging MERS has engaged in deceptive practices; Massachusetts has sued five lenders, alleging they knowingly pursued illegal foreclosures.
At Howard Law, P.C., our Westminster foreclosure defense lawyers are pleased to see California sticking to its guns and pursuing a settlement that could provide meaningful help to people who were hurt in the housing crisis. That includes people who were directly harmed by robo-signing or other illegal and unethical behavior by lenders, as well as people who are suffering because housing prices have dropped through no fault of their own. Throughout the robo-signing scandal, lenders have downplayed their responsibility, arguing that there was likely no real harm from that particular kind of illegal behavior. This may or may not be true -- instances of wrongful foreclosures have been reported -- but there's certainly widespread harm from, for example, their refusal to give meaningful consideration to loan modifications. Vincent Howard and our team of Norwalk foreclosure defense attorneys applaud Harris for refusing to let lenders off the hook for their actions.
If you've been fighting foreclosure, but your lender has been nothing but unhelpful, you should call Vincent Howard and the team at Howard Law, P.C., to discuss how we can help. You can reach us at 1-800-872-5925 or send us a message online.