The latest big headache for the banks: California AG Kamala Harris has pulled out of 50-state talks to come up with a settlement to foreclosure-gate/robo-signing issues.This probably kills the whole idea of a national settlement, since a) more states will likely drop out of the talks and b) banks aren’t going to be eager to make a big settlement that doesn’t ultimately make them immune from more legal liability.
David Dayen over at FireDogLake notes an interesting development: foreclosure fraud has become a big, salient political issue. Earlier yesterday, Gavin Newsom — who is a potential rival to Harris for the state’s governorship in 2014 — sent a letter demanding that she not accept a “bad deal” on foreclosures.
What’s more notes Dayen, Harris previously has been a big political ally of Obama, who by all accounts wants to get this bank issue settled.
So the bottom line: All around the country, it’s good politics to hold the banks’ feet to the fire. And of course, that’s just more bad news for the banks themselves.