California and Nevada AGs Announce Mortgage Investigation Alliance

Attorneys General Kamala Harris of California and Catherine Cortez Masto of Nevada have entered into a joint investigation alliance targeting both mortgage servicers and perpetrators of mortgage-related fraud.

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The AGs say the initiative is designed to assist homeowners who have been harmed by misconduct and fraud in the mortgage industry.

The alliance will link the California and Nevada attorney general offices' civil and criminal enforcement teams in order to speed up investigations 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,"" Harris said. She described the mortgage crisis as ""a law enforcement matter,"" adding

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that she and Masto will pursue prosecution to hold those responsible accountable.

The partnership forged between Harris and Masto illustrates the deep rifts that have developed within the attorney general camp in recent months over robo-signing settlement negotiations.

What started out as a united front of lead counsels from all 50 states has splintered as talks between the AGs and servicers has dragged on for over a year.

Massachusetts Attorney General Martha Coakley ""filed her own individual lawsuit"":http://dsnews.comarticles/gmac-counters-lawsuit-with-decision-to-pull-lending-in-massachusetts-2011-12-02 against the five servicers taking part in the negotiations last week.

The California-Nevada mortgage investigation alliance is the product of weeks of discussion between Attorneys General Harris and Masto to ascertain “the most effective and efficient means of achieving justice” for their respective states, the two said in a joint statement. Tuesday's announcement formalizes an agreement reached between the two officials last week.

By most measures, California and Nevada have been the states hardest hit by the nation's foreclosure crisis. The attorneys general note that the crisis in their states are similar because both employ a non-judicial foreclosure system in which a bank can foreclose on a borrower's home without court oversight.

“The collective result has created a rich opportunity for predators, leading both states to make mortgage-related law enforcement action a top priority,” according to Harris and Masto.