Aaron Glantz/The Bay Citizen

Attorney General Kamala Harris

California was one of a handful of states that did not meet a Monday deadline to sign on to an agreement with the nation's five largest mortgage servicers on how to compensate homeowners who wrongfully lost their homes to foreclosure.

Iowa Attorney General Tom Miller had set a deadline of 5 p.m. Eastern time for states to decide whether to participate in a $25 billion national settlement deal.

In a statement released Monday evening, Miller said that more than 40 states had signed on.

"This enables us to move forward into the very final stages of remaining work," Miller said.

A spokesman for California Attorney General Kamala Harris would not say whether Harris would eventually sign on to the agreement. Harris returned to the negotiating table Sunday after a four-month absence. In a statement Sunday, she said the current proposal still wasn't good enough.

“For the past 13 months, we have been working for a resolution that brings real relief to the hardest-hit homeowners, is transparent about who benefits, and will ensure accountability. We are closer now than we’ve been before, but we’re not there yet," she said.

Harris has consistently taken a hard line in the negotiations, with her office declaring as recently as Jan. 25 that the deal was "inadequate." When Harris walked out of the talks last fall, she argued the settlement, which is backed by the Obama administration, asked California to “excuse conduct that has not been adequately investigated.”

Harris has wanted to continue the state's investigations into possible illegal activities by the mortgage servicers — Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial — including hiring employees to sign thousands of foreclosure documents without verifying the information they contained.

Those banks have been negotiating for more than a year with U.S. Department of Justice and attorneys general from all 50 states on a deal that that would limit their civil liability, in exchange for billions of dollars in relief to homeowners. 

Multiple sources said the deal, as currently constructed, would result in payments of between $1,800 to $2,000 for individuals who wrongfully lost their homes to foreclosure.

Administration officials have said the settlement would also help about a million families get a $20,000 write-down on their mortgage.

Members of California's congressional delegation, who have been increasingly caustic in their criticism of the White House on housing issues, have characterized the proposed payments to homeowners as a "drop in the bucket." Nationwide, about 10 million American borrowers collectively owe $700 billion more on their homes than their homes are worth.

Representatives of labor, consumer and homeowner advocacy groups said they had been invited recently to consult with top attorneys in Harris' office.

In interviews, they said that while U.S. Department of Housing and Urban Development Secretary Shaun Donovan has predicted a settlement deal in a matter of “days,” any quick agreement that included California was unlikely.

"Iowa’s attorney general may think he's calling the shots on this, but Iowa is not deciding the fate of California," Art Pulaski, executive secretary-treasurer of the California Labor Federation, the state arm of the AFL-CIO, said in an interview.

"It may take a little longer, but we have to remember that these banks are dirty rotten bastards. We have to set up a system that provides real relief to homeowners and prevents them from pulling the same tricks again," Pulaski said.

Delaware and Nevada were also among the states that did not sign on before Monday’s deadline.

In an interview, Ian McConnel, who heads the consumer protection division in Delaware Attorney General Beau Biden's office, said, "Delaware continues to advocate for improvements" in the settlement and would set its own timeline.