California Attorney General Kamala Harris announced that California will no longer participate in the national foreclosure investigation and settlement talks with the nation's largest banks.
According the Los Angeles Times, California is withdrawing from the coalition of state attorneys general and federal agencies because the five largest banks in the country appeared unwilling to reach an agreement that would provide California homeowners relief that was commensurate with the amount that they had suffered due to inappropriate actions by the banks.
“It has been a process of negotiating and sitting at a table in good faith, but ultimately I have decided that we have to go our own course and take an independent path. And that decision is because we need to bring relief to Californians that is equal to the pain California experienced, and what is being negotiated now is insufficient," Harris told The Times in an interview.
Although the lead negotiator, Iowa Attorney General Tom Miller, has vowed that the negotiations will continue, the lack of presence by one of the states with the highest numbers of delinquency and foreclosure rates will weaken the coalition's ability to press the banks into a viable settlement.
The settlement talks have been focused on addressing issues of improper servicing and foreclosure practices that led to troubled homeowners being improperly foreclosed on. Some had raised concerns that the coalition may have weakened some of their demands on the banks in the effort to reach an agreement with the banks.
The move by California seems to highlight a growing rift among state and federal agencies about the best possible path for holding banks accountable for alleged misdeeds that helped fuel the mortgage meltdown. Resolution of the investigation and settlement talks had been seen as a key element to helping the housing market move past the mortgage crisis and begin to find stability.