California’s attorney general’s office subpoenaed Bank of America Tuesday to examine if Countrywide knowingly sold and marketed risky mortgage-backed securities to California investors, The LA Times reported citing people familiar with the matter.The report says the state (specifically, the office of Kamala Harris, the AG) is trying to determine if Countrywide, now owned by Bank of America, sold the investments under false pretenses.
A lot about the investigation is unclear, including the value of the mortgage-related securities, and the names of the potential investors that were allegedly duped.
What’s interesting is in September California’s attorney general Kamala Harris abandoned the 50-state foreclosure probe examining JPMorgan, Bank of America, Citigroup, Wells Fargo and Ally Financial.
Here’s what Harris had said was behind her decision to go it alone, according to the LA Times:
“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.”
Over the past year, attorneys general from all 50 states have been investigating abusive bank foreclosure practices and working to reach a settlement with the banks. Many in the Obama administration, the Justice Department and HUD have been pushing aggressively for a deal to be reached.
According to the LA Times, the attorneys general foreclosure probe has been trying to get Harris to rejoin the settlement talks.
In August, New York Attorney General Eric Schneiderman was kicked off the 13-person executive committee for negotiating a nationwide foreclosure settlement because he was “undermining” the effort.
He is said to object the deal because it could compromise future investigations into securitization practices by the banks.
Schneiderman along with Delaware’s Beau Biden, Nevada’s Catherine Cortez Masto and Massachusetts’s Martha Coakley have been vocal about wanting to continue their own probes after an agreement.
Business Insider Emails & Alerts
Site highlights each day to your inbox.