What could possibly be the social, economic or political incentive for the government of the State of California to negotiate a better deal for its underwater homeowners than could the other 49 states acting in concert? The California state Legislature including executive officers may be the only political body in the country more in the thrall of finance, insurance and real estate (FIRE) special interests than the US Congress.
State Attorney General Kamala Harris, leader of the go-it-alone policy, seems like a competent criminal prosecutor. However, given her connections to President Obama and his connections to Wall Street (and the imperious demand for a $1-billion campaign war chest), we suggest the California settlement might well be more favorable to FIRE than the settlement negotiated by the vast majority of states...which would put Harris in a favorable fund-raising position for her next statewide campaign.
Badlands Journal editorial board
Calif. attorney general pulls out of 50-state mortgage foreclosure settlement talks with banks