Little-Noticed Bill Could Make It Harder To Challenge Foreclosures

UPDATE: An Obama administration official tells HuffPost that the White House has 'concerns' about the bill.

Challenging foreclosures could become more difficult for homeowners if the president signs a bill that passed through the Senate last week. The little-noticed bill comes at a time when the validity of foreclosure proceedings across the nation has been called into question.

The House passed the bill in April, and its brisk journey through the Senate has drawn scant attention, Reuters reports. If signed into law, it would require courts to accept certain documents that have been notarized out of state, streamlining foreclosure proceedings and stripping homeowners of one legal method of challenging a foreclosure. The legislation would come just as a foreclosure validity crisis is mounting: GMAC, JPMorgan Chase and Bank of America have admitted to not properly reviewing some of their foreclosure documents.

The foreclosure controversies that have emerged in recent weeks throw doubts on the larger foreclosure system. A non-bank entity, Mortgage Electronic Registration Systems, has been initiating foreclosures, the Washington Post reports, exercising an authority that judges have ruled it does not have. In response to the mounting scandal, House Speaker Nancy Pelosi (D-Calif.) called on Tuesday for an investigation into foreclosure fraud. "This is a very big deal," she told HuffPost.

Ohio Secretary of State Jennifer Brunner told Reuters the timing of the bill's passage was "suspicious," implying that mortgage companies might have engaged in behind-the-scenes lobbying.

Comments

[Hagenj]

12:31 AM on 10/09/2010

Who introduced the bill , who voted for it?

Thats what we need to know HP!

[Hagenj]

12:33 AM on 10/09/2010

Sen. Patrick Leahy (D-Vt.), chairman of the Judiciary Committee, moved the legislation through the Senate without debate on Sept. 27.

[Dr Confuso]

06:12 PM on 10/08/2010

Isn't this the Bill that the President DIDN'T sign the other day? If it is, why is this story still up?

[Hagenj]

12:34 AM on 10/09/2010

this is that bill.

[gman1960]

04:24 PM on 10/08/2010

If this is true Obama this really bad news.
The word is out that Pres. Obama’s pocket veto of the Digital Robo-Signing Act was actually a trick. Sen. Harry Reid didn’t actually adjourn the U.S. Senate. The Senate has been kept in session by a little understood ruse and the bill will become law tonight at midnight without the President’s signature. If they're holding it open as is alleged (and they do this sometimes) then a pocket veto IS THE SAME AS A SIGNATURE
The big banks will file suit after the election to have this bill declared to be law.
Article I, Section 7 of the U.S. Constitution seems to support this view.
Some drunken bankers were already bragging about this an some major news outlets, including Fox News have reported on this.

[GiantsFan44]

09:55 PM on 10/08/2010

And 9/11 was an inside job

[bcainw]

04:13 PM on 10/08/2010

Can anyone tell me where I can find which House and Senate members voted for this? Please send links to [e-mail]

[plugnickle shortster]

12:08 PM on 10/08/2010

Pelosi and 30 Congressmen are requesting a federal investigation of the foreclosure practices of U.S. mortgage lenders. This can turn the U.S. mortgage industry into a quagmire.
[the cat is out of the bag on the infiltration of FNM and FRE (Fannie Mae and Freddie Mac) and making fraudulent mortgage paper which was sold around the world to investors to the tune of between 3.5 and 5 Trillion Dollar$ worth- which is what Hank Paulson was so freaked-out about back in 2008 when the ‘big crisis’ hit, the banker bailouts happened and The Fed guaranteed to buy up to $5 Trillion in FMN and FRE mortgage paper. Congress had to allow this ‘credit line’ to cover the Russians, Chinese, Germans etc who bought the ‘fake paper’ that was sliced and diced and sold around the world. Congress can’t possibly ‘fess up’ and tell the Truth about all this, instead they provide the ‘smoke screen’ of investigating foreclosure practices. You can’t foreclose on a property that has ‘fake paper’ issued on it, because you can’t produce the signed mortgage contracts ! And the Courts have been allowing foreclosures to move forward without the signed contracts being produced by the lender. Several legal actions are challenging all this ‘shortcutting’. Congress is trying to forestall things until it can be sorted out behind the scenes, if it can be sorted out.]
Read Catherine Austin Fitts - Nine Part exposé (especially part 5 and 6):
http. . . solari.com/articles/housing_bill

[GiantsFan44]

01:35 PM on 10/08/2010

I doubt it can be sorted out, but thanks for the link. I am going to read her articles.

[VanessaFas]

09:32 AM on 10/08/2010

I urge President Obama to come to New Haven. We have so many foreclosed, abandoned, and boarded up homes, that out-of-state investors feed on them like sharks on chum. While I don't understand exactly what the bill is supposed to do, I blame every homebuyer who bought at their maximum, not at their minimum. I have seen so many people buy a house, only to realize too late that they cannot afford the property taxes, the insurance, the water, the sewer. People are being foolish, running up credit cards, leasing new cars during a hard time, a bad economy. What did they think was going to happen? Cars get repossessed all the time. This is only slightly different. The banks are bending over backwards, gambling with high-risk loans, instead of putting away money and safeguarding it...wait, just like the average American family. Maybe it's a sign of the times, or a sign of the foolishness of these younger generations.

[lcr999]

01:37 AM on 10/08/2010

Congratulations everyone.

When you get a letter a year from now explaining that your pension fund went down by 20% because it invested in housing bonds that were uncollectable due to the inability to foreclose on delinquent borrowers, you can rest peacefully knowing that you stuck it to those evil bankers.

[Stacey Hopkins]

12:41 AM on 10/08/2010

I used to work in the mortgage industry and part of that time I worked "warehousing" loans. The job entailed making sure the closing documents were executed correctly with the proper legalities and in quite a few cases, documents were improperly notarized in order to get the documents to the lender within a certain time frame as these loans were bought and sold into pools the minute you locked in your rate.

The biggest problem I see is MERS, which is a blanket system of assigning mortgages to buyers of the notes and mortgages that became an industry standard, perhaps in anticipation of this event. Most borrowers didn't take the time to read their loan documents or ask just what MERS was, but with judge's making the determination that MERS doesn't have the authority, many of these foreclosures can (and should) be stopped by borrowers. I also wanted to add as a side note, don't be fooled by those catchy Ally Bank commercials; they're just the re-branded version of GMAC Bank, one of the major players in buying mortgage "paper".

[lcr999]

01:46 AM on 10/08/2010

As I see it, the borrower borrowed money from the lender and signed a contract, which for the sake of argument we will assume is valid. The lender then sold that obligation, or pieces of that, multiple times. There are only two choices. The courts can recognize the string of subsequent sales or they can not. If you dont recognize the resales, the the obligation still resides with the original lender. The contract with the home owner hasn't been invalidated, only the secondary transfers. So the home owner still owes SOMEBODY the money. And when they fiqure that out, the homeowner will still have to pay, principal, interest and penalty.

[GiantsFan44]

01:39 PM on 10/08/2010

No, the penalty should be written off. They should not pay for the banks mistake. Why would you side with a bank that did not follow the rules?

[Stacey Hopkins]

12:43 AM on 10/10/2010

Legally, the borrower will still be liable for any monies due under the terms stated in the original loan documents, but the question of the foreclosure moratoruim isn't disputing the validity of the loan,but whether or not the entities who are foreclosing have the legal right to do so as the subsequent transfers may not be valid. If the transfers or assignments of mortgages/deeds are flawed, then legally only last valid entity in the chain of title can foreclose.

[dieselis]

12:04 AM on 10/08/2010

First they changed bankruptcy laws just ahead of the impending crash. Now this gets slipped in on the sidebar. So I'm just insane I guess,but I'am thoroughly convince J.F.K was last leader of the free world. Anyone slips through and actually try's to lead Our Country will have the guarantee of meeting the same fate He meant. From front to back just look at the last 50yrs and prove to me how wrong I'am.

[florenzfan]

02:52 PM on 10/08/2010

His head wasnt blown off in the middle of the street for all the world to see for nothing!

[Gunther Steinberg]

10:48 PM on 10/07/2010

Seems that the financial industry used their muscle and money to get those bills quietly through Congress. It seems that senators and Congress persons tend not to read bills they vote on at the recommendation of their favorite lobbyist - campaign donations do speak loudly and allow members to wipe their mental cognizance clean.

[Collielady]

07:24 PM on 10/07/2010

They're now reporting that Obama will not sign the bill. So much for this morning's news.

[jalaroc]

04:51 PM on 10/07/2010

Who introduced the bill? And telling a court it must accept certain documents without question seems a bit of an overreach by congress. Can members of congress be subpoenaed by state legislatures? If so, whoever introduced this bill, I'd have every state with a mortgage problem having that individual testifying about the mortgage problem (not the bill itself because congressional work is protected by the constitution) in general because they're obviously an "expert" during their entire recess from congress. Make their lives a living hell that many so many foreclosed citizens have had to endure.

In addition, if a house is foreclosed, the bank needs to take the financial hit right then and there and write the loss on the books, no more forestalling putting loses down while they're foreclosing willy nilly. Maybe that will make them actually want to work with the homeowners. Finally, make the banks legally responsible for their agents who conduct foreclosures. You know, people who break into houses to change the locks and steal stuff, houses that sometimes aren't actually into foreclosure because the bank never bothered to followed procedure. There's alot that can be done to end these abuses of power, we just have to be as d$ckish as they are.

[muhair]

06:03 PM on 10/07/2010

Seems the media can't see the trees for the forest. Endless analysis of polls and insider speculation are no substitute for boots to the ground reporting, which now, sadly, is considered talking to anonymous well-placed sources in govt office. The Fourth Estate needs to do its job, and that includes HuffPo.... before, not after, the fact.

[florenzfan]

02:54 PM on 10/08/2010

here here.

[Mr Hankey]

09:56 AM on 10/08/2010

H.R. 3808:
Interstate Recognition of Notarizations Act of 2009

Bill Sponsor: Rep. Robert Aderholt [R-AL4]

Cosponsors:
Bruce Braley [D-IA1]
Michael Castle [R-DE]
Artur Davis [D-AL7]

Hmmm, Alabama and Iowa Dems

[GiantsFan44]

04:30 PM on 10/07/2010

Funny how a bill sponsored by a Republican that is going to hurt people is deemed inconsequential by the tr0lls here.

[DUSAA-1775]

06:21 AM on 10/08/2010

OH !! good scoop there...I was not aware that this was a republican bill that was crammed down the throat of the democrats. Perhaps Harry Reid should have tried to filibuster

[GiantsFan44]

01:41 PM on 10/08/2010

Where did I say crammed down? Seems to me by putting words in my mouth, you are one of the guilty tr0lls

[Bud Whiteye]

04:13 PM on 10/07/2010

We must all presume that it is dangerous to place ones welfare in the hands of anyone who could take that away from us. Our homestead is our personal safety zone therefore it should not belong to any other group. It should not be thought that we are buying a home if there is any chance one cannot afford such things. It is not fair to make it too hard to own a home; whoever it is, yet we willingly sign agreements that could leave us in debt and homeless. As a people we must demand a better system. For this is our country and what we desire as a people must be considered. Or we can assume that we are already trapped in a system designed to help us fail. lets not say we never get any help. Redy White

[Old Ed inVN]

04:03 PM on 10/07/2010

Oh my gosh. This bill will end civilazation as we almost know it.
That is if you only have a 5th grade education.
Read the darned bill iffen the words ain't not to big.