San Francisco (Obama.net)- A bill was sent to the President of the United States this week that would simplify the process in which courts can clear foreclosures.
That would have been enabled by making it mandatory for courts on both the state and federal levels to allow paperwork that was filed in other states. Thus, a court system that is already pushed back months due to a large number of cases would be able to finalize numerous cases faster and speed up the process.
The House of Representatives voted yes on the bill in April, while the United States Senate approved it on September 27th.
However, as reported yesterday, there are issues going on with the accuracy of foreclosure cases. Many lenders are beginning the foreclosure process without the proper documentation and with incorrect information. Thus is why many are saying that the bill would make it harder to challenge an incorrect foreclosure.
Robert Gibbs, the spokesperson of the White House said, “We have heard from officials around the country about the concern that they have about the possible unintended consequences of this legislation, certainly in light of what we are seeing in the mortgage process.”
Gibbs further made it clear that to protect the people of the United States who have incorrectly been foreclosed on and the ones who might be foreclosed on in the near future, President Obama “will send the bill back and believes that Congress did not intend for those unintended consequences to be in the legislation.”
Due to the recent problems with foreclosure cases, numerous banks have already frozen their foreclosure processes in order to revisit the cases individually and make all the correct amendments to them as needed.
As announced yesterday, Bank of America joined GMAC and JP Morgan Chase in freezing foreclosures.
However, the freezes only take effect in the twenty-three states where the court system controls the foreclosure process. In the other twenty-seven states, the foreclosures will continue.
Most politicians have backed off the bill. Republicans and Democrats alike have both said that the bill had nothing to do with the recent foreclosure problems and that amid these new issues, the foreclosures should in fact be frozen and not sped up. Many are making it clear that the bill was written up well in advance of the problems coming to light.
With Obama’s pocket veto, the bill now goes back to Congress. Whether they choose to amend it or trash it is something we will find out in the near future.