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Two Obama initiatives to address foreclosure crisis face hurdles

The president's proposals include an expanded refinancing plan for struggling homeowners and a new, aggressive probe of financial firms' mortgage practices.

January 26, 2012|By Jim Puzzanghera and Alejandro Lazo, Los Angeles Times

"This could have been a last-ditch effort to push them to the finish line," Sanders said of the settlement talks.

Schneiderman has been one of the most aggressive state attorneys general in investigating the actions of financial firms and others leading up to the housing bust. Along with California Atty. Gen. Kamala D. Harris, Schneiderman has balked at broadly releasing banks from legal liability as part of the foreclosure settlement talks.

They and several other attorneys general are concerned that the immunity would be so broad that it would preclude other investigations into the causes of the crisis.

A spokesman for Schneiderman said he would not sign on to any settlement that would limit his ability to investigate the mortgage crisis. Meanwhile, a spokesman for Harris said the attorney general believes that the current settlement proposal is inadequate for Californians.

Despite Obama's announcements, California House Democrats on Wednesday asked to meet with him to appeal for more aggressive action to deal with foreclosures, including putting in place a plan to reduce the principal on underwater mortgages.

"We've met with everybody else in the administration with no satisfaction that they fully understand the magnitude of this problem with respect to the families that we represent," Rep. George Miller (D-Martinez) said.

Staff writer Richard Simon contributed to this report.

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