Obama vetoes foreclosure bill

Obama vetoes forclosure bill

President Obama on Thursday did not sign a bill that would ease restrictions on notarization of foreclosure documents and allow them to be prepared electronically, citing concerns that the measure could worsen the problems caused my erroneous foreclosure documents filed by banks.

The president wants the bill to be sent back to Congress for fixing because the current form of the measure has “unintended consequences on consumer protection,” according to White House Press Secretary Robert Gibbs.

Obama also did now want multiple states to process the same foreclosure documents. Consumer groups and state governments had earlier said that the bill would make it tougher for homeowners to contest foreclosure cases made in other states.

The vetoed legislation would have allowed mortgage firms to produce foreclosure files in bulk and replace a notary’s seal with a digital one, possibly worsening the existing problems with the documents, said O. Max Gardner, a consumer lawyer based in Shelby, North Carolina.

“They could process more foreclosure cases with improper and invalid documents and make it more difficult for consumers to try to fight,” Gardner said.

The president exercised a so-called “pocket veto” which lets the bill lapse after ten days without being signed during a Congressional break. Obama also used this kind of action in December 2009 to fix a technicality on a bill for more defense expenditure.

There has been public outcry over reports that mortgage firms have evicted homeowners using ill-prepared court documents. Federal and state authorities are closely scrutinizing the mortgage sector because of possible liabilities.

Posted by James Fried on Friday October 08 2010, 8:37 AM EDT. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0