President Obama enacted a ‘pocket veto’ earlier today, blocking a bill coming from Congress (HR3808) that would have sped up the status of numerous foreclosure proceedings. The pitch for the bill was that it would ease interstate commerce by allowing states to expedite each others’ foreclosure confirmations, and thus help clear out the backlog of foreclosures that many blame for the ongoing malaise in the housing market. According to CNNMoney.com, “The bill would have required federal and state courts to recognize documents that were notarized in other states. Both congressional chambers approved the legislation by voice votes, a move used for noncontroversial bills. However, housing advocates and attorneys warned that the bill might have made it more difficult to challenge the quality of foreclosure records at a time when reports of improperly foreclosed homes are increasing.”
Not only are such reports increasing, one can not help but also smell the presence of big-bank lobbyists getting their way. Or are we being paranoid?
The bill would attempt to speed up foreclosure proceedings in numerous ways, including a provision to allow electronic/digital notarizations of foreclosure warrants to be valid in all fifty states (Many states do not currently accept digitally notarized documents). Yet such digital processing has been at the center of recent legal challenges, as so-called ‘mortgage mills’ churn out thousands of foreclosure documents a day without human oversight. John Spinelli of the Examiner.com in Ohio has an excellent report showing how the Secretary of State, Jennifer Brunner, has been trying not only to stop the practice as it pertains to Ohio residents but also to build a case of willful fraud against some of its practitioners.
The news agency Reuters also noted the coincidence of the bill ‘quietly zooming’ through Congress just as many homeowner associations were challenging the status and oversight of many foreclosures posted over the last few months.
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 legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
Despite the fact that the bill passed Congress without debate in either house, the White House felt compelled to block it, though the administration’s blog offered a conciliatory statement about working with Congress to get the foreclosure backlog sorted out after a reconsideration of this particular bill.
As our regular readers know, we try to avoid (political) conspiracy theories unless some kind of evidence has been produced by research groups or serious reporters. But really: this is the Congress who passed health care provisions for first-responders of the September 11th attacks in 2001 only two weeks ago(!). This is the same Congress who has yet to get US aid to Haiti after the January earthquake because Republican Senator Tom Colburn does not like the $1 million in administration and staffing (over five years!) of a $1.5 billion dollar package. This is the same Congress that would rather renewing, ending, or adjusting the Bush era tax cuts that have driven us into a trillion dollar ditch (to paraphrase one of Obama’s favorite metaphors). Yet when they get a bill speeding up foreclosures and covering banking interests if the foreclosure documents are challenged in court? That one flies through, apparently without many even reading the legislation.
The Roman Censor, Cato the Elder, believed the citizens and armies of the city of Carthage were the greatest threat to the Roman Republic, and he would include with any speech on any topic given to the Senate the warning “Delenda est Carthago!” (Carthage must be destroyed!). In this rhetorical repetition only I must compare myself to him, as I finish this posting with yet another reminder that the Supreme Court allowed corporate money to enter political campaigns and coffers anonymously this past January. Though no evidence has been (yet) produced, I can not help but assume some of that money has been spent by banks to ensure their interests get expedited. Let’s see what happens after their midterm candidates get into the game.