A lawsuit filed by a state attorney general (not in California) is another indication of the cracks that are forming in the once hoped-for settlement between all of the states' attorneys general and the major mortgage lenders over the banks' fraudulent foreclosure practices.

San Diego foreclosure lawyers have noted that new the lawsuit specifically names five major banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC -- as being guilty of using foreclosure practices that undermined the legal process and put homeowners at a disadvantage, to say the least.

Specifically, the lawsuit filed by the Attorney General of Massachusetts claims the banks broke that state's law by being "unlawful and deceptive" in the foreclosure process. This includes providing false documentation, executing unlawful foreclosures, using deceptive practices in regards to modifying loans, and using a technique called robo-signing, which has a bank employee sign off on foreclosure documents without ever confirming their veracity.

Foreclosure proceedings were temporarily suspended at these banks in 2010, when the fraudulent practices came to light. In the time since, the banks have been working with the governments of all 50 states trying to reach an agreement on how foreclosure practices would be handled going forth.

Complications have arisen from these negotiations because not all states are able to agree on appropriate settlement terms. An agreement was believed to be in sight earlier this year before the state of California announced that it would reject the terms of the proposed agreement.

The new lawsuit increases the pressure on the banks by getting the court system involved.

Source: USA Today "Mass. sues banks over deceptive foreclosure practices" Dec. 1, 2011