California Pulls Out of 'Inadequate' Foreclosure Settlement

The Associated Press
Kamala Harris
Kamala Harris

SACRAMENTO, Calif. -- California Attorney General Kamala Harris [pictured left] said Friday that she will not agree to a settlement over foreclosure abuses that federal officials and other state attorneys general are negotiating with major U.S. banks.

Her announcement is the latest to undermine a resolution that had been in the works between the banks and attorneys general in all 50 states. Other states including New York also have expressed reservations about the deal, which would help keep people in their homes and compensate borrowers who faced improper foreclosures.

The agreement was supposed to settle claims of poor mortgage and foreclosure practices, including document fraud known as "robo-signing" -- approving documents in foreclosures without actually reading them.

However, Harris said the pending deal is "inadequate for California homeowners" and gives bank officials too much legal immunity.