Provisions in many states' foreclosure laws prohibit: a) Signing foreclosure documents without inspecting them, and b) signing foreclosure documents without knowing who has clear title to the property.
Lawsuits from distressed homeowners are flooding the courts, putting the fate of all foreclosures burdened with securitization in question. The banking lobby flunkies in Congress quickly tried to herd through a bill giving them a loophole. The House passed the bill in April, and its brisk journey through the Senate has drawn scant attention. 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 entire 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. As a result, the president has just announced he will NOT sign this bill!! At last -- a chance for homeowners and the president to bring the mortgage industry back to the bargaining table on mortgage relief and reform!!! That this opportunity comes as a result of the financial services industry outsmarting itself with complex mortgage instruments -- makes the moment all the more poetic -- and pregnant with a chance for justice. Call the president and urge relief for homeowners!!
