Is HR3808 The Equivalent of TARP 2 and Obama's 'Get Out Of Bail' Gift Card for the High Frequency Signing Scandal?

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Now that the
High Frequency Signing (HFS, not to be confused with HFT) scandal
is mainstream, and virtually every single foreclosure in the US
in the past several years is under question, with the impact on
mortgage servicers (who just happen to be the TBTF banks) could
be just as dire as the fallout from the credit crunch, it appears
that the get out of jail card for the banking syndicate has once
again materialized, this time in the form of bill HR3808: Interstate
Recognition of Notarizations Act of 2009
, sponsored by Republican
representative Robert Aderholt. The bill, it turns out, has passed
both congress and senate, and is now quietly awaiting for Obama’s
signature to be enacted into law. In summary, the bill requires
all federal and state courts to recognize notarizations made in
other states.

That’s the
theoretical definition: the practical one – the legislation,
if enacted, could protect bank and mortgage processors from liability
for false or improperly prepared documents. In other words,
with one simple signature Obama has the capacity to prevent tens
of billions in damages to banks from legal fees, MBS deficiency
claims, unwound sales, and to formally make what started this whole
mess: Court
perpetrated by banks, a legal act, and to finally trample
over the constitution. Will Obama do it? Potentially – the
banking lobby certainly has enough power over him and his superiors,
the members of the FOMC. On the other hand, the populist revolt
that will surely follow the enactment of such a law will certainly
end any dreams of a second term, and potentially of a completed
first one. The drama is now on: will Obama openly side on behalf
of the bankers (without a "blame the republicans" fall
back this time) or of the foreclosure "victims" (granted,
the bulk of whom are deadbeat homeowners who should never have owned
a home to begin with). We doubt a decision will be reached before
the midterms, although quite a bit now hangs in the balance.

explains the situation:

A bill that
homeowners advocates warn will make it more difficult to challenge
improper foreclosure attempts by big mortgage processors is awaiting
President Barack Obama’s signature after it quietly zoomed through
the Senate last week.

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.

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.

The White
House said it is reviewing the legislation.

is troubling to me and curious that it passed so quietly,"
Thomas Cox, a Maine lawyer representing homeowners contesting
foreclosures, told Reuters in an interview.

The timing
certainly is odd. As readers will recall, the event that catalyzed
it all occurred
on September 16
, giving the banking lobby sufficient time to
flex its tentacles and get passage enacted quickly and quietly.

After languishing
for months in the Senate Judiciary Committee, the bill passed
the Senate with lightning speed and with hardly any public awareness
of the bill’s existence on September 27, the day before the Senate
recessed for midterm election campaign.

The bill’s
approval involved invocation of a special procedure. Democratic
Senator Robert Casey, shepherding last-minute legislation on behalf
of the Senate leadership, had the bill taken away from the Senate
Judiciary committee, which hadn’t acted on it.

the rest of the article

9, 2010

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