Nevada, California Team Up on Foreclosure Fraud Investigation
On the day when protesters are highlighting the foreclosure crisis, the Attorneys General of California and Nevada have opened a joint investigation into mortgage and foreclosure fraud. This west coast tandem of Nevada’s Catherine Cortez Masto and California’s Kamala Harris provides a counterpoint to the work being done on the east coast by New York’s Eric Schneiderman and Delaware’s Beau Biden, along with the lawsuit against the big banks for foreclosure fraud pursued last week by Massachusetts’ Martha Coakley. Among these AGs you can see the difference between talk and action.
This is from the press release on the announcement.
By forging this alliance, California and Nevada will combine investigative resources, including litigation strategies, information, and evidence gathered through their respective ongoing investigations, assisting each state as it pursues independent prosecutions.
This alliance will link the offices’ civil and criminal enforcement teams, speeding along the full, fair and adequate investigation of wrongdoing in the two states, which have experienced similar foreclosure and mortgage fraud crises.
“The mortgage crisis is a man-made disaster that has taken a heavy toll on the country, but it saved its worst for California and Nevada,” said California Attorney General Kamala D. Harris. “The mortgage crisis is a law enforcement matter, and we will prosecute to hold accountable those who are responsible and also protect the homeowners who are targeted for fraud. I am delighted that California and Nevada are entering into this alliance to leverage the best results for our investigations and look forward to forging similar collaboration with other states.”
“I am pleased to join forces with General Harris to fight against fraudulent mortgage and foreclosure practices that continue to devastate lives, homes, and the economy in Nevada and California,” said Nevada Attorney General Catherine Cortez Masto. “This strong partnership will allow our states to make an even more concerted effort to hold fraud perpetrators accountable and ensure law-abiding homeowners receive justice.”
Both Harris and Masto have been busy with separate investigations. Harris formed a mortgage fraud strike force to weed out criminal activities, and subpoenaed Fannie Mae and Freddie Mac recently over their mortgage activities. Masto sued Bank of America for violating a previous settlement on loan modifications of Countrywide loans, and she indicted mid-level employees at LPS, the document processing company, for robo-signing. Masto just charged three additional notaries in the case.
Joining forces will allow more resources to be devoted to the cases. Nevada and California are two of the most distressed states in the nation when it comes to housing, with foreclosure rates at epidemic levels. Both Nevada and California are nonjudicial foreclosure states, making it more shadowy territory for foreclosure scams. Still, fraud is rampant in both states, including in state courts and county recorder offices. It’s fertile territory for investigations.
Both states have pulled out of the state AG investigation which for over a year has attempted to create a settlement on these issues with the big banks. The normal course of events for such a negotiation is that you would actually do the investigation, and then move to the penalty phase. Nevada and California are merely following standard practice. The moribund AG “investigation” has not, and now they have become irrelevant.