Kamala Harris

By Rick Daysog
rdaysog@sacbee.com
Published: Wednesday, Dec. 7, 2011 – 12:00 am | Page 1A
Last Modified: Wednesday, Dec. 7, 2011 – 9:07 am

Promising to hold lenders accountable for abuses that helped fuel the foreclosure crisis, California has entered into a broad alliance with the state of Nevada to investigate the nation’s mortgage industry.

On Tuesday, California Attorney General Kamala Harris joined Nevada Attorney General Catherine Cortez Masto in Los Angeles to announce the pact, which they said will fast-track their previously separate investigations. California and Nevada have the highest foreclosure rates in the nation.

“We believe that there must be accountability and consequences associated with this crisis,” Harris said. “We also believe there must be meaningful relief for people in the process of foreclosure and in the process of modifying their home loans.”

The deal follows Harris’ announcement in October that California was pulling out of nationwide settlement talks with the country’s biggest banks. Since then, the state has aggressively pursued its own investigation into “robo-signing” allegations that banks and mortgage servicers rubber-stamped foreclosures without actually reviewing homeowners’ documents.

Harris has said the proposed national settlement – widely reported to be about $20 billion – was inadequate and provided too much immunity for bank officials.

On Tuesday, she said that a wide-ranging investigation could “provide a better sense” of a fair deal for California homeowners.

So far, the state has subpoenaed more than a million pages of documents from many of the nation’s largest financial institutions and mortgage servicers, including Fannie Mae, Freddie Mac, Bank of America Corp. and Lender Processing Services Inc.

Nevada’s Masto, meanwhile, sued Bank of America last December for allegedly violating a 3-year-old agreement with her state over predatory lending practices by its Countrywide unit.

Masto’s suit, which was amended in August, alleged that the nation’s largest lender filed wrongful foreclosures against homeowners with pending loan modification requests and raised interest rates on troubled borrowers after promising to lower them.

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