Saying their states are hardest hit by the nation's foreclosure and mortgage crises, the attorneys general of California and Nevada formalized Tuesday a joint investigation alliance to help homeowners victimized by fraud, officials said.
California Attorney General Kamala D. Harris and Nevada Attorney General Catherine Cortez Masto said they are willing to partner with other states and provide support as California and Nevada investigate how pervasive is fraud in foreclosures and mortgages.
Harris said she has heard anecdotal stories during town hall meetings throughout the state about misconduct in the origination, servicing and foreclosure portions of the mortgage industry.
"That is part of our investigation, is to see how pervasive is the fraud," Harris told reporters at a news conference Tuesday morning.
Their joint probe, during which the two states will share information, subpoenas and witnesses, will also seek reforms to protect homeowners, the officials said. Harris described the mortgage crisis as nationwide "man-made disaster" that has inflicted its worst toll on California and Nevada.
So far, the alliance has produced "millions of pages of documents" and the development of mutual targets for investigators, officials said.
A multiple-state initiative is under way to seek a settlement with the nation's five largest banks on alleged mortgage abuses, but California backed out of that arrangement in September because officials were concerned about whether the settlement would be "sufficient" for the state's property owners, Harris said.
Masto said her state is monitoring the initiative to see what the final terms are.
California and Nevada officials are looking at a range of alleged misconduct by mortgage institutions and others.
"What we also know is that the investigations and our actions relate not only to these institutions who commit wrongdoing but also the predators that have evolved around the distress and the crisis," Harris said. "We have seen other scams that have involved brokers and lawyers and others who are taking advantage of distressed homeowners who are simply trying to do everything and anything they can to keep their homes."
Las Vegas has seen a rental scam in which a person has fraudulently told homeowners in foreclosure that he is authorized to rent out their homes, and renters have moved in unwittingly, Masto said.
courtesy of: http://articles.cnn.com/, Michael Martinez, CNN
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