California Attorney General Announces the State’s Withdrawal from Settlement Talks with Banks and Promises Further Investigation

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Attorney General Kamala Harris’s decision to withdraw California from the talks is a welcome development to distressed homeowners and their advocates, such as UFAN.

United Foreclosure Attorney Network

United Foreclosure Attorney Network

UFAN applauds Attorney General Harris for not agreeing to be part of settlement talks which would have only a small impact on California homeowners.

California Attorney General Kamala Harris announced last week that California would pull out of settlement talks that would have released some of the country’s major banks from liability surrounding their lending and foreclosure practices, the Wall Street Journal recently reported.    According to the report, Harris stated that the proposed deal was "inadequate for California homeowners" and gives bank officials too much legal immunity. The state is being asked as part of the settlement "to excuse conduct that has not been properly investigated," Harris wrote. According to the Wall Street Journal, she has promised to continue her own investigation.

The impact of the announcement is expected to have a positive effect on the efforts of advocates representing homeowners against the major banks. UFAN Legal Group, PC dba United Foreclosure Attorney Network (UFAN) is one such advocate and is representing clients in litigation who have been taken advantage of by their mortgage lenders. UFAN has filed lawsuits against Bank of America (case # 34-2011-00109314) and Wells Fargo title (case # 34-2011-00110146) in Sacramento County Superior Court, alleging multiple causes of action related to their mortgage lending and servicing practices.

“UFAN applauds Attorney General Harris for not agreeing to be part of settlement talks which would have only a small impact on California homeowners,” says Kristin Crone, attorney and CEO of UFAN.

California had been part of joint talks among all 50 state Attorneys General that would have offered a nation-wide settlement and release from liability for the large banks in return for significant reductions in mortgage debt owed by distressed homeowners, according to media reports.

However, according to the Associated Press, the settlement would have only been able to help around 20,000 California homeowners out of 2.2 million. The AP reports that in return, Californians would have given away all future rights to pursue investigations and litigation around a broad list of fraud that has been committed.

According to the Wall Street Journal, the settlement discussions had stalled recently over exactly what the release from liability would cover. In return for a $20-25 billion figure, the major banks are demanding a wide ranging release covering loan origination, securitization and servicing practices, fair-lending procedures, and their use of the Mortgage Electronic Registration Systems. Federal and state officials, however, are reluctant to agree to such a comprehensive release. Sources close to the discussions have said that officials are insisting that the release not include immunity from wrongdoing relating to fair lending and securitization, the Wall Street Journal reports.

According to the AP, in addition to California, New York, Delaware, Nevada and Arizona have also withdrawn from the settlement talks. These states have been some of the hardest hit by the foreclosure crisis. Despite these withdrawals, the nationwide effort is pressing forward, and any deal reached would be presented to all 50 states, the AP reports.

Harris said California will go at it alone in negotiating a settlement with the banks that would keep more families in their homes. She also promised to seek regulations and legislation to prevent future problems, according to the AP report.

Complementary consultations available.

ABOUT THE UNITED FORECLOSURE ATTORNEY NETWORK

UFAN Legal Group, PC dba United Foreclosure Attorney Network (UFAN) is a Roseville, California-based law firm providing mortgage litigation and other debt related legal services. The dedicated attorneys and staff at UFAN work tirelessly to seek justice and fight for the rights of its clients. For more information call toll free 1-866-400-4242.

This release may constitute attorney advertisement. The information in this release and on the UFAN website (ufanlaw.com) is for general information purposes only. Nothing in this release or on the UFAN website should be taken as legal advice. Prior successes are no guarantee of future performance. Litigation is inherently uncertain and results in litigation are never assured.

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