Home > Avid Law Center, Foreclosure, Loan Restructuring > California Returns to the Negotiation Table

California Returns to the Negotiation Table

According the Los Angeles Times, California has resumed negotiations on the multibillion-dollar, multi-state mortgage settlement with the nation’s largest banks. Friday’s deadline for individual states to either reject or accept the deal has been pushed to today.

California Atty. Gen. Kamala Harris walked away from negotiations last year and had originally held out on agreeing to the settlement, seeking tougher terms for banks. In a statement Sunday night, Harris said the door still remained open for California to join.

“For the past 13 months we have been working for a resolution that brings real relief to the hardest-hit homeowners, is transparent about who benefits and will ensure accountability,” Harris said. “We are closer now than we’ve been before, but we’re not there yet.”

If California agrees to the settlement the pot for mortgage relief nationwide would increase to $25 billion from $19 billion. Another important potential backer, Attorney General Eric T. Schneiderman of New York, has also signaled that he sees progress on provisions that prevented him from supporting it in the past. Support from both states would be a significant accomplishment for the administration, which in recent weeks has been trying to step up its aid for the failing U.S. housing market.

Under the proposed settlement, banks would be forced to provide financial assistance for homeowners who experienced foreclosure or are in danger of losing their homes. If approved, the settlement would require banks to overhaul their mortgage servicing and foreclosure practices and include a component for principal write-downs which has been recognized as the best way to help underwater homeowners and stabilize the housing market.

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