California and Nevada are some of the hardest hit states by the sluggish housing sector and the high number of foreclosures. Trying to improve the situation, authorities in the aforementioned states are working to change banks’ foreclosure practices. With this intent, California and Nevada have joined forces to investigate mortgage fraud probes and force negotiations with banks.
Yesterday, Attorneys General Kamala Harris of California and Catherine Cortez Masto of Nevada announced the partnership between the two states. According Kamala Harris, the cooperation is designed to speed investigations of wrongdoing in mortgage loan origination, servicing and securitization. The banks that are investigated have not been named.
The partnership has been named the Mortgage Investigation Alliance and it will improve communication between both states’ civil and criminal enforcement teams. Kamala Harris said the two states are “expanding and accelerating” investigations to “maximize relief that can be brought to homeowners”. “What we know is that these homeowners want accountability and they want consequences, and they deserve to have both” added Harris.
For California and Nevada the foreclosure issue is huge. Both states are “non-judicial foreclosure states”, which means that banks can initiate and conclude foreclosures on homeowners late on their mortgage payments within nine months. The process is so fast because banks don’t have to bother going through all sort of court proceedings to put a foreclosure sign on a home.
Last year, California has recorded the biggest number of foreclosures in the United States, with a total of 549,669 foreclosures. A staggering 4 percent of the state’s housing units. On the other hand, Nevada had a total of 106,160 units or 9.4 percent. Kamala Harris pointed out that in California one out of every 243 housing units has been foreclosed, while in Nevada the ratio is one for every 180 housing units.
Two months ago, California backed out of the 50 state coalition that was negotiating a settlement with the largest banks in U.S. regarding possible frauds and their foreclosure practices. Harris explained that “despite your diligence and our good-faith effort to reach reasonable terms with the banking industry, there now exists a proposed settlement that is inadequate for California homeowners”.