Firm commentary:  The take away from the announcement that the two states attorney generals will enter into a joint investigation alliance designed to assist homeowners who have been harmed by misconduct and fraud in the mortgage industry is that California AG Harris is playing catch up and is not up to speed on the scope of fraudulent foreclosures in California.

 Harris is overly focused on a few rogue attorneys and scam artists who have exploited homeowners. She did not express any knowledge of the ROBO-SIGNING fraud that is prevalent in the courts and public record system.  No mention was made of the lenders and servicers practice of manufacturing ASSIGNMENTS so as to create the illusion of valid mortgage transfers instead of modifying loans.

While protecting homeowners is important, throwing all FC defense attorneys in the class of KASLOW KRAMER is like throwing the baby out with the bath water.  Correct the practices of lenders and you eliminate much of the opportunity of foreclosure predators.  

That said, the announcement was a step in the right direction especially if it allows the AG to get up to speed and join the fight against these fraudulent practices.

Attorneys General of California and Nevada Announce Mortgage Investigation Alliance

Video news conference, part 1:  http://www.youtube.com/watch?v=PE5hDJcEKsk&feature=youtu.be

Video news conference, part 2:  http://www.youtube.com/watch?v=CLJVMV1KqFU&feature=youtu.be

Press release :http://oag.ca.gov/news/press_release?id=2590        

LOS ANGELES -- Attorneys General Kamala D. Harris of California and Catherine Cortez Masto of Nevada today announced that their states have entered into a joint investigation alliance designed to assist homeowners who have been harmed by misconduct and fraud in the mortgage industry.

By forging this alliance, California and Nevada will combine investigative resources, including litigation strategies, information, and evidence gathered through their respective ongoing investigations, assisting each state as it pursues independent prosecutions.

This alliance will link the offices' civil and criminal enforcement teams, speeding along the full, fair and adequate investigation of wrongdoing in the two states, which have experienced similar foreclosure and mortgage fraud crises.

"The mortgage crisis is a man-made disaster that has taken a heavy toll on the country, but it saved its worst for California and Nevada," said California Attorney General Kamala D. Harris. "The mortgage crisis is a law enforcement matter, and we will prosecute to hold accountable those who are responsible and also protect the homeowners who are targeted for fraud. I am delighted that California and Nevada are entering into this alliance to leverage the best results for our investigations and look forward to forging similar collaboration with other states."

"I am pleased to join forces with General Harris to fight against fraudulent mortgage and foreclosure practices that continue to devastate lives, homes, and the economy in Nevada and California," said Nevada Attorney General Catherine Cortez Masto. "This strong partnership will allow our states to make an even more concerted effort to hold fraud perpetrators accountable and ensure law-abiding homeowners receive justice."

By most objective measures, California and Nevada have been the states hardest hit by the nation's foreclosure crisis. In October 2011, Nevada and California ranked first and second, respectively, for the percentage of their housing units that entered the foreclosure process, reflecting a parallel surge in foreclosures in the two states. One in every 180 Nevada properties entered the foreclosure process in October, and one in every 243 California homes received a filing that month. In 2010, California led the nation with a total of 546,669 foreclosure filings (4 percent of the state's housing units), while Nevada led the nation with 9.4 percent of its homes receiving a foreclosure filing (totaling 106,160 units).

The crisis in these Western states is similar because both states share a foreclosure system in which a bank can foreclose on a borrower's home without court oversight, also called "non-judicial foreclosure." The collective result has created a rich opportunity for predators, leading both states to make mortgage-related law enforcement action a top priority.

In May 2011, Attorney General Harris formed a Mortgage Fraud Strike Force, now composed of nearly 40 attorneys and investigators, that has launched a wide series of investigations and litigation. The Mortgage Fraud Strike Force has instigated legal actions, including a lawsuit alleging false representations and other unlawful conduct in the marketing of multi-million dollar "mass joinder" lawsuits, and the arrests earlier this month of three top officers of a Stockton real estate company who took thousands of dollars in up-front loan modification fees and made false promises to assist struggling Central Valley homeowners with lowering their mortgage payments.

In 2007, Attorney General Masto formed the Nevada Mortgage Fraud Strike Force that launched a wide series of investigations and litigation into areas including violations of the law related to mortgage lending, servicing, and foreclosure practices and the creation, rating, marketing, sale, and management of mortgage backed securities. The Nevada Mortgage Fraud Strike Force has taken action against predatory "mortgage rescue" companies and individuals claiming to offer services to stop foreclosures. Last month, the Strike Force announced the indictments of Gerri Sheppard and Gary Trafford, who led a massive robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents. Nevada is also suing Bank of America and its subsidiaries, including Countrywide, for violations of a Consent Judgment for mortgage servicing and mortgage origination irregularities.

The Mortgage Investigation Alliance is the product of weeks of discussion between Attorneys General Harris and Masto regarding the most effective and efficient means of achieving justice for their respective states. Today's announcement formalizes an agreement reached between the two officials last week.