California Attorney General Kamala Harris and Nevada Attorney General Catherine Cortez Masto said they intend to team up to look into a wide array of abuses, including mishandled documents, shoddy loan servicing, and the questionable ways in which mortgages were bundled and sold to investors. [...] Meanwhile, the settlement being negotiated by a coalition of state attorneys general and federal officials would force banks to overhaul the way they service loans and pay about $25 billion in penalties that could aid troubled homeowners. Talks have stretched for more than a year, but officials say they are pushing for an agreement by year’s end. [...] “We don’t think the deal is dead without California,” said Geoff Greenwood, spokesman for Iowa Attorney General Tom Miller, who is leading the talks. “But California is arguably the state most impacted by foreclosures, so it is an important state.” Greenwood said the alliance between California and Nevada needn’t undermine the settlement negotiations, which are limited to “robo-signing” and other non-criminal foreclosure practices. “There are other cases to pursue beyond the terms of our settlement,” he said.

Big news in the fight for potential justice for people fraudulently foreclosed upon, at least people in Nevada and California

It's very difficult to imagine Harris signing off on a settlement that lets banks of the hook, forcing them only to cough up a relative insignificant $25 billion for their part in destroying the global economy. Harris also has reiterated that she believes "the proposed terms of the deal were 'insufficient' and ... a deeper investigation is warranted before signing a deal that might let banks off too easy."

Given that she's joined by Nevada's Masto, New York’s Eric Schneiderman and of course Massachusett's Martha Coakely in calling for much harsher sanctions, it seems less and less likely that the proposed settlement will go through. Incidentally, in addition to suing five of the nation's largest banks over the fraud in Massachusetts, Coakely has ratcheted up her fight by putting pressure on Congress to investigate Ally Financial Inc. and a subsidiary, GMAC Mortgage because they are largely owned by the Treasury.