Citing a troubling surge of recent foreclosures in California, state Attorney General Kamala Harris today pulled out of a pending nationwide settlement with major U.S. banks over foreclosures abuses.

In a letter to Associate U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller, Harris said the deal is "inadequate" for homeowners while providing too much immunity for bank officials.

"After much consideration, I have concluded that this is not the deal California homeowners have been waiting for," wrote Harris.

"(The) relief contemplated would allow too few California homeowners to stay in their homes."

A coalition of attorney generals in 50 states have been working on a finalizing a settlement with five of the largest mortgage services in the country. The Wall Street Journal reported in May that the banks face a minimum potential liability of $17 billion from civil lawsuits if a settlement is not reached.

The coalition was formed back in October in wake of the so-called "robo-signing scandal," in which some banks and mortgage servicers were accused of rubber-stamping foreclosures without actually reviewing homeowners' loan documents.

In announcing that California would reject the settlement, Harris said she has broadened the state's Mortgage Fraud Strike Force mandate to investigate all aspects of the mortgage process, including how loans are originated, how they are serviced and how they bought and sold on the secondary market.

Harris cited as one reason for her decision the recent upswing in foreclosures in California during the past two months. According to DataQuick, the number of notices of default statewide - the first step in the foreclosures process -- rose 72.5 percent in August -- to 29,120 from July's 16,877.

During the same period, the four-county Sacramento area saw an 81.7 percent upswing, DataQuick said. That included a 211.6 percent increase in filings by Bank of America Corp.

"At the same time we have been negotiating in good faith, foreclosures in California have surged again," she said.