California is considering joining New York and Delaware in a wide-ranging investigation into Wall Street’s role in the mortgage meltdown that could lead to criminal charges against financial executives.
New York and Delaware have more than a dozen attorneys working full time on the effort and have subpoenaed or requested information from 13 financial firms, including Goldman Sachs and JPMorgan Chase & Co., according to people familiar with the investigation.
California would represent a vital addition to the investigation because it was the location of a vast number of the mortgages and foreclosures that fed into the crisis. Since home prices peaked in 2007, California homeowners have lost $1.9 trillion in home equity, according to an estimate by the research firm Moody’s Economy.com.
Harris told The Times: “California was disproportionately harmed by the mortgage crisis, and our homeowners badly need relief. We will critically evaluate every possible avenue of relief for Californians. If it will result in real accountability and real results, no option will be off the table.”
California Atty. Gen. Kamala Harris met with New York Atty. Gen. Eric Schneiderman on Thursday in San Francisco to discuss cooperating on the investigation, which is already one of the broadest to probe how banks encouraged the financial crisis through the creation of risky financial instruments backed by mortgages.
In May, Harris announced the creation of a 25-person task force to look at mortgage fraud, but she recently said that effort could be thrown into limbo by state budget cuts imposed this month.
Banks can start bailing out the overextended mortgage holders!!