Sanchez hits Harris’ record on mortgage settlement in Senate race

by Matt Fleming | October 20, 2016 12:49 pm

Loretta Sanchez on Thursday attacked Kamala Harris’ record on the 2012 mortgage crisis settlement, saying it was not the major accomplishment the state’s attorney general claims. 

The two Democrats are running for the state’s open U.S. Senate seat. With the election rapidly approaching, and lagging in both fundraising and polling, the Orange County congresswoman has increasingly been on the attack, even calling for another debate, which the Harris campaign quickly rejected.

Harris has said throughout the campaign that she’d played a key role in the settlement negotiation with the banks that won around $20 billion for California homeowners. But, citing multiple media reports, Sanchez said Harris did not lead in the talks, deferring to New York and Delaware, was not tough enough on banks and failed to protect the settlement from being raided by the state government.

“Despite pledging to get tough on the banks, Kamala Harris did not lead the charge as she claims and never filed charges against a single bank,” Sanchez said in a statement. “That is why consumer groups have criticized Ms. Harris for her failure to follow-up on the mortgage settlement.” 

Settlement negotiations

In 2012, the settlement between the country’s five largest mortgage servicers and 49 states was announced. But talks began in 2010, just before Harris was elected attorney general. 

Months before the settlement was reached, Harris pulled the state out of the negotiations, which the Los Angeles Times[1] recently wrote “delivered a major setback to the negotiations.” Harris argued California’s portion of the settlement was “crumbs on the table” and stepped away from talks.

Whether Harris took a leading role is up for debate. However, her decision to walk away, taking with her the largest state by far in terms of population, no doubt influenced discussions.

In the end, California homeowners got around $20 billion, which was mostly for debt relief. However, as the Times reported, around half of the debt relief funds (about $9 billion) was used to help homeowners sell their way out of underwater mortgages, leaving them forced to move. 

(An earlier version of this story reported that the Harris campaign did not respond to Sanchez’s attacks. However, there was actually a miscommunication between CalWatchdog and a Harris spokesperson. The campaign was not given an adequate opportunity to respond.)

Task force and bill of rights

In response to the mortgage crisis, Harris took two major actions: forming a Mortgage Fraud Strike Force “to investigate and prosecute misconduct at all stages of the mortgage process,” and championing the Homeowner Bill of Rights, which is “designed to guarantee basic fairness and transparency for homeowners in the foreclosure process,” according to the AG website.

Sanchez hit at the lack of criminal cases against the banks, noting that the strike force filed only 18 criminal cases in five years, but none were against a major bank executive. By contrast, district attorneys throughout the state have prosecuted far more cases.

Harris told the Times, however, that crimes clearly occurred, “But we went where the evidence took us.”

However, at least one homeowner advocacy group was critical of Harris’ record of enforcement, writing off her efforts as empty showpieces for her Senate run.  

“Kamala Harris used homeowners to secure her political future, but in the end, she has refused to pursue justice by prosecuting any bankers,” wrote Occupy Fights Foreclosures. “Despite early promises, little has been done to deter the crimes and risky financial practices that created the housing bubble.”  

State raids the piggy bank

According to The Huffington Post[2] in 2015, “Harris had said that California would set aside $360 million for housing counseling, legal aid, consumer financial protection investigations and other initiatives meant to mitigate the damage caused by the foreclosure crisis, which hit the state particularly hard.”

However, as the Sanchez campaign pointed out, when Gov. Jerry Brown and the Legislature decided to divert around $331 million of that money to balance the budget, it wasn’t Harris who fought the state. Instead, it was Latino, Asian and African American groups who won back the money[3].

Debates

With the election just weeks away, Sanchez called for another debate, this time “to explain why (Harris) is misleading the people of California on her role, the actual relief provided to homeowners, and what as senator each of us should do to protect the people of California from corporate predators.”

To date, there were two debates in the primary and only one in the general, with both sides blaming the other for the inability to schedule more. 

“Our campaign is done debating debates and has been for weeks,” said Harris spokesman Nathan Click. “Congresswoman Sanchez had three chances to make her case on a debate stage against Kamala Harris in this campaign, and she even rejected a Sacramento debate our campaign had agreed to.””

Source URL: https://calwatchdog.com/2016/10/20/sanchez-hits-harris-record-mortgage-settlement-senate-race/

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