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California, New York Attorneys General Question 'Robo' Settlement Terms

Attorneys General Kamala Harris of California and Eric Schneiderman of New York both say they will likely reject the terms of the nationwide foreclosure “robo-signing” settlement because they don’t go far enough to protect consumers and hold major banks accountable.

Obama Administration officials and a group of state Attorneys General are circulating a proposed $25 billion settlement with major banks over “robo-signing” issues, which involved massive abuses of notarization. States have until February 3 to decide if they will sign off on the deal.

Harris said last week that the terms do not do enough to help California homeowners — a state that has suffered one of the highest foreclosure rates in the country.

In New York, Schneiderman, who was initially was involved in the settlement negotiations, said he may also reject the settlement because he believes authorities have done too little to investigate the role of big banks in the financial crisis.

Settlement talks began as a joint effort between Attorneys General with the intent of bringing in aid for hundreds of thousands of troubled homeowners who had been served faulty foreclosure documents. Many of these practices that led to the faulty and fraudulent documents stemmed in part from a lack of education and understanding about the role and responsibilities of Notaries in the workplace — on both the part of Notaries and their employers.

Michael Lewis is Managing Editor at the National Notary Association.

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