Last night Reuters correspondent Scot Paltrow revealed that a bill had sailed through the Senate last week — without public debate — which would have made it significantly harder for homeowners to challenge improper attempts to foreclose on their houses. The legislation, which was sitting on President Barack Obama’s desk for his signature, would have forced courts to recognize out-of-state notarizations, including those stamped en masse by computers in other states, a practice critics say has been used improperly to push through foreclosure orders. Computer notarizations, now valid in around a dozen states, would effectively have become legal nationally, and challenges to improper notarizations made in other states would have become harder and costlier.
Today, after the story became public, the White House announced that Obama was sending the legislation back to the House of Representatives for further discussion – a so-called “pocket veto.” Given the rising chorus of lawmakers calling for all foreclosures to be suspended, the legislation now looks dead.
As Reuters Breakingviews columnist James Pethokoukis wrote today, the foreclosure scandal is lousy timing for Wall Street, the fallout likely to further erode the financial industry’s standing among the general public and in Washington. That could make it harder for Wall Street to influence lawmakers and regulators next year as they seek to implement and flesh out this year’s sweeping financial reforms.
Here are our top stories from Washington today…
Obama will not sign foreclosure-friendly bill
President Barack Obama will not sign legislation that could make it more difficult for homeowners to challenge unjustified foreclosure actions, the White House said. The bill, which zoomed through the Senate last week with no public debate, would save bank and mortgage processors from liability for foreclosure documents that were prepared improperly. Its passage caught homeowners’ advocates, including lawyers and some state officials, by surprise.
For more of this story by Caren Bohan and Scot Paltrow, read here.
For analysis from our Breakingviews columnist James Pethokoukis, click here.
IMF, World Bank call for cooler heads on currencies
World leaders must defuse currency tensions before they worsen to avoid repeating the mistakes of the Great Depression, the head of the World Bank said. The push among nations for a trading edge, reminiscent of the strains that exacerbated the Great Depression, is also expected to be a primary topic of discussion when G7 finance leaders hold a closed-door dinner on Friday.