Dem pols, labor & community groups target CA AG Harris on mortgage fraud talks

It looks like labor and community groups are starting a strong push to get California Attorney General Kamala Harris to have her reject a settlement with the nation’s five largest banks around their wrongful foreclosure and robosigning practices. The pressure is coming from the California Federation of Teachers, California Nurses Association, SEIU 721, and Alliance of Californians for Community Empowerment. The group also has high-profile Democratic elected officials like Rep. Maxine Waters and Lt. Governor Gavin Newsom.

Lt. Gov. Gavin Newsom has joined a group of California union leaders, activists and politicians in calling the direction of negotiations “a deeply flawed settlement proposal with the banks at the heart of the nation’s mortgage crisis.”

The coalition is called Californians for a Fair Settlement and it’s hard to imagine it not having a major impact on Harris. These groups are huge in the Democratic power landscape in California; Waters and Newsom are two of the highest profile Democratic elected officials in the state.

Five Democratic Attorney Generals have taken strong positions against the settlement talks being led by Iowa AG Tom Miller, Miller has sought a broad release of liability for the banks in areas that have not been investigated. The AGs leading the fight to this point are New York’s Eric Schneiderman, Delaware’s Beau Biden, Nevada’s Catherine Cortez Masto, Minnesota’s Lori Swanson, and Kentucky’s Jack Conway. Schneiderman and Biden represent the states were essentially all mortgage back securities were formed and are incredibly important to the outcome for both homeowners and investors. Nevada has been devastated by the bursting housing bubble. But California has the nation’s largest economy and over two million homeowners underwater on their mortgages. One of Californians for a Fair Settlement’s demands is strong principle reductions for underwater homeowners – something that is as needed anywhere in the Golden State than anywhere else in the country.

Not shockingly, CNBC reported yesterday that banks are also lobbying Harris heavily to join Miller’s settlement. We will now get to see whether Harris is more influenced by huge swaths of the Democratic base, representing hundreds of thousands of California residents, or big banks who are stealing these peoples’ homes. Her decision could be determinative for the fate of Miller’s ill-conceived settlement talks: joining them could add momentum that they have not had for months, while rejecting them could ensure their final demise.

For Californians looking to take action targeting Harris online, has a petition up and running.

Late Update:

On Friday, Kamala Harris announced she would not be participating in Tom Miller’s 50 state settlement talks and would instead conduct her own investigations into foreclosure fraud. This could well be the death blow to the 50 state talks. The fight isn’t done, but it’s heartening to see a prominent elected official listen to her constituents and do the right thing. Good for Kamala Harris.

Matt Browner-Hamlin is a blogger & political strategist based in Washington, DC. He has written about US politics since 2004. He's worked on presidential and Senate campaigns, in the labor movement and the Tibetan independence movement. He is the founder of and currently spends much of his time fighting Wall Street banks. Matt on Google+, and his .

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