Kamala Harris, as California's Attorney General, played a pivotal role in securing significant mortgage relief from JPMorgan Chase and other major banks during the aftermath of the Great Financial Crisis. This effort culminated in a landmark settlement that provided substantial financial relief to California homeowners and pension funds.
### Background and Initial Settlement Talks
In the wake of the foreclosure crisis, a coalition of state attorneys general and federal agencies began negotiating with the nation's largest mortgage servicers, including JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Ally Bank/GMAC Mortgage. These banks were accused of using illicit tactics to wrongfully foreclose on homeowners. The initial settlement talks proposed a compensation range of $2 billion to $4 billion for California, which Harris deemed insufficient to address the damage caused by the banks' practices[2][3][4]. ### Harris's Hardball Tactics Frustrated with the progress of the negotiations and the low-ball offers from the banks, Harris decided to pull California out of the nationwide settlement talks in September 2011. This move was risky but strategic, as she believed the proposed deal failed to provide adequate relief and shielded the banks from future investigations[2][3].
### The Heated Exchange with Jamie Dimon In a critical moment during the negotiations, Harris made an impromptu phone call to Jamie Dimon, the CEO of JPMorgan Chase. This call quickly escalated into a heated exchange. Dimon accused Harris of trying to steal from his shareholders, to which Harris retorted that her shareholders were the homeowners of California who had been robbed. This confrontation highlighted Harris's determination to secure a better deal for her state[3][4][5].
### The Final Settlement Harris's tough stance paid off. Two weeks after the heated phone call with Dimon, the banks significantly increased their offer. The final settlement provided California with $20 billion in homeowner relief, a substantial increase from the initial offer. This relief included principal reductions on home loans, financial assistance, and other forms of support aimed at helping homeowners stay in their homes[2][3][4].
### Additional Settlements and Impact In addition to the $20 billion homeowner relief, Harris also secured a separate $300 million settlement with JPMorgan Chase over misrepresentations in residential mortgage-backed securities sold to California's public employee and teacher pension funds, CalPERS and CalSTRS. This settlement aimed to reimburse the pension funds for their losses and included $4 billion in relief to aid consumers across the country[1].
### Legacy and Ongoing Impact Harris's efforts during the foreclosure crisis have been lauded as one of her signature accomplishments as Attorney General. The settlements not only provided immediate financial relief but also set a precedent for holding large financial institutions accountable for their actions. This experience has shaped Harris's approach to dealing with corporate America, balancing enforcement with a willingness to engage constructively when necessary[3][4][5].
