Once again President Obama finds himself faced with a catastrophe created by a combination of big business interests and poor federal regulatory oversight. White House advisor David Axelrod said today that the administration is pressing lenders to accelerate their reviews of foreclosures to determine problems with documentation. Last week I urged a call to action to tell President Obama not to sign H.R. 3808. That bill would have loosened notary paperwork requirements for foreclosing on mortgages, already shown to be lax and in some instances, even fraudulent.
Fortunately, President Obama "pocket vetoed" the bill two days after the call to action, "foreclosing" the bill's chances of becoming law. Had the bill been signed into law, it would have made it easier for lenders and servicers to skip the notarization safeguards in many states' requirements meant to assure the integrity of documents for matters of great import and sensitivity such as foreclosures.
Mr. Axelrod said, "Our hope is this moves rapidly and that this gets unwound very, very quickly." There's the rub--right there. The Obama administration is talking about waiting on the nation's lenders to: 1) review mortgage foreclosure documents in which they have an interest, 2) decide which ones are problems, 3) correct the paperwork (their own employees and attorneys performed it poorly or illegally in the first place--so now they are supposed to do it right?), and 4) convince the American public that everything is okay now.
The "hope" that so many voted for in 2008 can be supplied by the current administration's exercising of decisive yet careful leadership. The President's veto of H.R. 3808 gave so many beleaguered Americans a first glimmer of hope in what has been an American nightmare. Finally, when the president vetoed H.R. 3808, one was chalked up for the little guy or gal, but it's not enough. Our president, who I believe is well-intentioned, can now take a step further, and he needs to.
I urge President Obama not leave this one up to big business. It's too critical. Government has been complicit in this fiasco, and the American public has begun to figure this out.
Now is the time for bold and creative leadership by the president. A nationwide moratorium sounds great to many, but Mr. Axelrod is correct that it would stop valid foreclosures from going forward. Moreover, state laws govern foreclosure proceedings, and anything but a voluntary moratorium by lenders and servicers would likely be stalled by state and federal litigation over states' rights. Instead, I propose the creation through the U.S. Department of Justice a "Mortgage Foreclosure Strike Force," a plan that would not require Congressional approval and that will do the following:
The last thing President Obama should do is to wait for hope. He must seize it for the American people and answer this call to leadership. He showed what a country could do in 2008 by bringing people together. Now it's time for him to do it again.
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