Obama Expected to Veto Foreclosure Bill
By REUTERS
Published: October 7, 2010
WASHINGTON (Reuters) — President Obama will not sign legislation that could have made it more difficult for homeowners to challenge foreclosure actions as unjustified, the White House said Thursday.
The White House communications director, Dan Pfeiffer, said the president would send the bill back to the House of Representatives for further discussion of how it would affect the foreclosure crisis, which has become a nationwide concern after reports that banks had acted improperly to evict struggling borrowers.
“We believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized,” Mr. Pfeiffer said in a blog posting.
A White House spokesman, Robert Gibbs, said earlier that officials were meeting on the bill, which cruised through the Senate last week with no public debate. It could have shielded bank and mortgage processors from liability for foreclosure documents that were prepared improperly. The bill would have required courts to accept all out-of-state notarizations, including those signed en masse, a practice critics say has been improperly used to expedite foreclosure orders.
False notarizations figured in the disclosures that GMAC, JPMorgan Chase and other big mortgage processors had filed false affidavits in thousands of cases, part of the wave of foreclosures that came with the financial and economic crisis.
The bill, passed by the House in April, seemed destined to die in the Senate Judiciary Committee. But on Sept. 27, the day before the Senate recessed for the midterm election campaign, the bill was rushed through and passed by the full Senate.
The bill, the Interstate Recognition of Notarizations Act, received almost no public attention, but it stirred controversy once the Senate’s unusually rapid passage of it became public.
The Justice Department said Wednesday that it was investigating reports that the mortgage lenders had improperly evicted struggling borrowers as a growing chorus of lawmakers on both sides of the aisle demanded investigations.
At least three banks have already halted eviction proceedings, and some lawmakers have called for an industrywide moratorium on home repossessions until the problems are fixed.
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