Obama won't sign notary bill that might speed home foreclosures

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The White House announced this afternoon that President Barack Obama would not sign a bill to ease restrictions on interstate commerce, which some consumer advocates feared would also make it more difficult for homeowners to fight fraudulent foreclosures.

The legislation would generally require state and federal courts to recognize notarizations made by a notary public in any state — and require courts to recognize electronic notarizations. Democrat Patrick Leahy of Vermont, pushed the legislation through the Senate without debate last month.

Separately, a senior House Democrat asked major U.S. lenders to temporarily suspend foreclosure proceedings nationwide because of allegations of forged signatures and robo-signers who rubberstamped foreclosure affadavits without examining them. Three big lenders have already suspended home foreclosures in 23 states, including New York.

New York Rep. Ed Towns, chairman of the House Oversight and Government Reform Committee, sent letters to CiitiMortgage, JP Morgan Chase, Wells Fargo Home Mortgage, Bank of America, One West Bank, PHH Corp., U.S. Bank Home Mortgage, Ally Financial (formerly known as GMAC), Sun Trust Mortgage, and PNC Financial Services Group. Towns also asked New York State Attorney General Andrew Cuomo to examine allegations of mortgage fraud.

As Financial Reform Watch reported earlier today, the allegations of forged and backdated documents and notaries not taking time to review mortgage papers is hardly surprising to those who have been watching the U.S. mortgage industry for the past few years.

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