California prides itself on setting trends for the nation. This week, it may be the state that bucks the trend if it decides to abstain from a multi-state and federal settlement with the big banks on mortgage abuses.
States must say by the end of this week whether they are in or out of the deal and California is very much in doubt. Attorney General Kamala Harris, a rising star in the Democratic Party, is concerned the banks may get off too easily. Just last week, her people were calling the settlement “inadequate.”
But can she afford to walk away from more than $10 billion that homeowners could collect in her state, where the housing crisis has ravaged communities from Stockton to San Diego? And would she be able to get more for them if she went it alone?
It’s hard to say. But the other states are working hard to convince California to come along. And the Obama administration, in need of a victory on the housing front in this election year, wants that large, trend-setting state on the Left Coast to join. A deal for the nation isn’t so good (or national for that matter) without California.
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States to decide this week on mortgage deal
State and federal officials are close to a settlement with the largest banks over mortgage abuses, with states facing an end-of-the-week deadline to decide whether they will sign on, people close to the talks said. The final value of any settlement will depend on which states it includes, and could drop sharply if states like California, one of the hardest hit by the foreclosure crisis, do not join.