Desert Underwater: Attorneys General Balk at Proposed Deal

By Colleen McCarty , Kyle Zuelke

Published 11/22 2011 09:20PM

Updated 11/23 2011 04:06PM

Copyright 2017 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

LAS VEGAS - Nevada Attorney General Catherine Cortez Masto is one of a handful of attorneys general nationwide who are critical of a proposed deal that would require states to stop pursuing criminal and civil action against the country's biggest banks.

In exchange, according to some reports, lenders would pay an estimated $25 billion to help struggling homeowners modify their loans.

The settlement stems from the robo-signing scandal that broke last year. Banks temporarily suspended foreclosures as a result of allegations their employees rubber-stamped foreclosures without reviewing them.

As the I-Team reported last week, there's evidence those practices continue in Nevada. It's one reason Masto says she won't sign anything that lets the banks off the hook.

"You know what? From my perspective, don't come into my state and take advantage of these folks and think you're going to be able to walk away from it," she said.

The Mortgage Foreclosure Multi-State Group was initiated late last year. Attorneys general from all 50 states raised questions about improper, and potentially illegal, foreclosure practices.

"Whether it's an individual, or an agency, or Wall Street or a bank, to the extent that we have the resources to move forward, we will do so," Masto said.

Masto's refusal to release the banks has attracted national media attention.

During a recent appearance on HBO's "Real Time with Bill Maher", Delaware Attorney General Beau Biden - who last month filed a lawsuit against the Mortgage Electronic Registration Systems or MERS - aligned himself, Masto and New York Attorney General Eric Schneiderman.

Schneiderman was the first to pull out of the settlement talks.

"You want to spread around the retribution then. Is that why you're naming those people?" Maher asked Biden.

"No, I'm naming them, because they're doing their jobs," Biden replied.

Like Biden and Schneiderman, Masto is actively investigating mortgage fraud. A 606-count criminal indictment announced by her office last week against two suspected robo-signers is the first of its kind in the country.

Nevada is also one of only two states to take civil action against Bank of America - the Silver State's largest lender.

"We'll continue to focus and figure out what's the best strategy moving forward to find relief for homeowners. It could be a combination with the multi-state at the end of the day or it may not," Masto said.

Masto's chief concerns with the multi-state include any broad release that would prevent her from continuing to investigate and any distribution of monies based on population instead of need.

The terms of the deal are not yet finalized and haven't been made public, so it's difficult to know how it would work.

Certainly, there are those consumer advocates who suggest that some financial relief is better than none at all.

Copyright 2017 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.