(Updated) One Last Bankers Gift from the Senate

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Cross-posted at Progressive Blue.

Update: Obama Will Not Sign Bill Seen As Cover For Bank Foreclosures. Apparently a pocket veto.

This is almost comical. If you are a member of the “enthusiasm gap,” have watched the Democrats represent the bankers over constituents and  get the felling that Nancy Pelosi’s recent call for federal probe on mortgage lenders was nothing more than a letter to be forgotten on November third, here’s a little verification for you.  

Apparently another great letter writer, Patrick Leahy who wrote so many sternly written letters to the Bush administration but never got around to a subpoena, is capable of taking action. After claiming “constituents” called him and pressed to have the “Interstate Recognition of Notarizations Act”  pushed through, he got right on it.

The Senate doesn’t seem partisan once they hear their master’s voice. Not a Democratic filibuster for a bill meant to protect bank and mortgage processors from liability, not the Democratic majority voting down “out of state electronic notarization,” but a banker’s bill that passed in the Senate by unanimous consent on the day before they all went back to their states so they can tell constituents how Democrats represent the Middle Class.  

This “debate free” bill quietly zoomed through the Senate.

The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.

The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan and Bank of America.

Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.

The Ohio Secretary of State, Jennifer Brunner had a few thoughts about timing.  

When I learned of it last Thursday, it sounded innocuous to me, but then I started looking at the timing of the bill. GMAC, owned by Ally, had just suspended its foreclosure actions in 23 states, including Ohio. I had already referred Chase Home Finance, LLC, on August 23, 2010, to the U.S. Department of Justice, asking it to review and investigate Chase’s document notarization practices in home foreclosures (18,000 documents per month were being notarized by 8 people, along with other irregularities). I license notaries in the State of Ohio. Even though I don’t have the power under state law to investigate or prosecute, I couldn’t stand idly by without acting. That’s why I’m asking you to email or call the President at 202-456-1111 to ask him not to sign the bill.

Last Wednesday, the day before I announced the DOJ referral, JPMorgan Chase announced it was having third party counsel review its document procedures for foreclosures. Just two days before, the U.S. Senate had rushed through H.R. 3808. Something didn’t seem right. Since then others agree with me.

That’s all that’s left for a bill that interferes with individual state’s rights to regulate,  justifies “electronic” notarizations stamped en masse by computers and gives banks a chance to use  false and improperly prepared documents to throw Americans out on the streets, President Obama’s signature.

The White House said it is reviewing the legislation.

Will you be making that call to the White House?

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    • Eddie C on October 7, 2010 at 4:47 pm
      Author

    Why am I thinking about when Biden was just a lowly old Senator but managed to rally other Democrats around the Bankruptcy Abuse Prevention and Consumer Protection Act and comparing that with a President of the United States that just could not put together fifty Senators to push through the Public Option in resolution?

    History and enthusiasm, they just don’t go together.  

    • Eddie C on October 7, 2010 at 4:52 pm
      Author

    It’s just to much.

    Real estate watchers have heard of news of GMAC and JPMorgan Chase putting a halt on foreclosure proceedings. What they have not heard of is a bill – which has passed the Senate with lightning speed – that will make it harder to nullify improper foreclosure attempts by banks and mortgage processors. The bill, which is only getting media attention now, is already awaiting President Barack Obama’s signature.

    The law, named “Interstate Recognition of Notarizations Act”, requires all state and federal courts to recognize as valid notarizations that were made in other states. Notarizations stamped en masse by computers, or electronic notarizations, are also included in this bill.

    The bill had been sitting idle in the Senate Judiciary Committee for months but sped through approval and without public awareness on September 27. This made others question the timing of how it was acted upon; even the bill’s main sponsor, Republican Representative Robert Aderholt, was surprised at how it did not ignite any public debate.

    How do you rationalize that?  

    • Eddie C on October 7, 2010 at 5:14 pm
      Author

    Right on the line “We cannot sustain,” as if on que, the presidential seal fell to the floor.  

    • Eddie C on October 7, 2010 at 6:30 pm
      Author

    Here’s a link, Q&A: Putting the Robo-Signer Scandal Into, Context that helps to explain Senate action.

    How’s the foreclosure process supposed to work? There are so many stories about the process going wrong, it’s almost hard to know what it was supposed to look like.

    In judicial foreclosure states, there are requirements that certain legal papers be in order, like the party foreclosing has to possess an original note for the loan, and the mortgage has to be assigned to the party doing the foreclosure, and there ought to be a law firm that is dealing with actual, physical papers that they get.

    In a proper functioning legal system, you’d have local law firm, say, in Pittsburgh, Pennsylvania, that is sent all the relevant loan documents, deals directly with someone who has authority to modify the loan, and makes critical decisions about loss mitigation issues. That was standard practice 20 years ago in mortgage foreclosures across country.

    In non-judicial states, law firms conducting private sales are also supposed to be getting all of the proper loan documents themselves in their office. They would also be in contact with the people who own the note and mortgage and could make decisions about modifications.

    But what you see now is the “foreclosure mill” [law] firms processing paperwork at a local level are often two or three levels down from even the major servicer. So say you have a major servicer like Wells Fargo, and Wells Fargo has contracts with different trusts that own mortgages. What Wells Fargo and other servicers typically do is when loans in their servicing portfolio fall into default, the information about those loans is transferred to other entities, like this Lender Processing Services, LPS, and what LPS does is manage data platforms. LPS has the authority to hire attorneys and firms throughout the country to foreclose on those Wells Fargo mortgages.

    They don’t want state governments deciding what is and isn’t a proper document.  And bankers don’t want all of that red tape. Got to get them out quick and sell it to someone else.

    But if you are a new buyer don’t expect too many title insurance options, too risky.    

  1. …. of course, nobody would ever actually get charged with a crime or go to trial or jail just for stealing somebody’s house, but at least Eric Holder is up to protecting the old Abramoff squad from the messy reality of when bad things happen to bad congresspersons….  and keeping us safe from watching other people get stoned and get the munchies, so they can get drunk and gamble more at casinos instead.

    Whoops. my cynicism bad.  

  2. don’t follow all that many people on twitter but this shit is a-flyin’ today.  

    Tweet of the Day:

    emptywheel  @KagroX Are you suggesting that by claiming to pocket veto, Obama is actually going to let this pass w/o having to be responsible for it?

  3. he actually vetoed it. They must really be getting some bad polling. WTF is congress’s problem are they so blind that they thought no one would notice. How can we be properly scccared when they are equally scary and just as crooked and nasty as the Republican’s they wave around as the only reason to vote. I believe that’s called extortion.  

    • Edger on October 7, 2010 at 11:29 pm

    He is sending it back to the house. Which makes it a ‘real’ veto (Armando)

  4. his strategy will now be to embrace the ancient chinese game of Weiqi. The purpose of the game is to control as much empty space on the board by creating encircling walls.

    Historically, this is a game of the upper classes and the bureaucracy, as the common people had no taste for it.

    Some days I completely refrain from seeking information about anything. I hoped this day to be that day. Although I’ve gathered there’s some new psychobabble floating legislation in Washington about whether the banksters need good old fashioned proof to steal people’s houses, I first need to confer with Rasputin, my pet lizard, before I say anything.

    • Eddie C on October 8, 2010 at 1:18 am
      Author

    The PBS Newshour that does tend to do their homework did not offer a story but in the news of the day, setting aside Armando’s claim, Hari Sreenivasan clearly stated that it was a pocket veto.

    Yesterday on the Newshour there was ‘Robo-Signing’ Paperwork Breakdown Leaves Many Houses in Foreclosure Limbo for info on the issue.  

  5. I didn’t see a bird!  Did you see a bird?

  6. …of “Web of Debt” fame, has an interesting article:

    Fraud in Home Mortgages: “ForeclosureGate” and Obama’s “Pocket Veto”

    .

    posted on globalresearch.ca as of today’s date (10/08/10).

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