Amid growing concern regarding the possible mishandling of delinquent mortgages, mortgage modifications, and foreclosures by certain financial institutions, the White House said yesterday that President Obama will veto legislation requiring states to recognize notarizations performed in other states. The measure, sponsored by Representative Robert B. Aderholt (R-Ala.), was designed to facilitate interstate commerce and easily passed both the House of Representatives and the Senate. The White House stated that the authors of the bill probably had good intentions, but that we need to “think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors.”
Also yesterday, Representative Edolphus “Ed” Towns (D-NY), Chairman of the House Committee on Oversight and Government Reform, called on top U.S. mortgage lenders and banks to voluntarily freeze foreclosure proceedings. Three major lenders have already announced they are halting certain foreclosure proceedings in 23 states, but Representative Towns is concerned that the problem is systemic. Representative Towns is also asking New York State Attorney General Andrew Cuomo to examine allegations of mortgage fraud and violations of the law associated with Bank of America, JPMorgan Chase, and Ally Financial, along with all other banks and mortgage servicers doing business in New York.