What the hell: How stealth banking bailout reached Obama’s desk; Update: Here comes the first O-veto; White House: We’ll work on it
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Both the left and right sides of the blogosphere are buzzing about a bipartisan TARP-style banking bailout bill that somehow reached President Obama’s desk in the legislative rush before Congress adjourned for the midterm election break.
The sordid episode underscores everything I’ve spotlighted about the culture of corruption over the last two years — sabotage of the deliberative process, circumventing of rules, backroom deals, and contempt for the will of the people.
Yes, the Vampire Congress strikes again.
The bill is HR3808, the “Interstate Recognition of Notarizations Act of 2010,” which requires courts to accept as valid notarized letters made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents. Here’s the legislative history of the bill.
Reuters lays out the basic story:
A bill that homeowners advocates warn will make it more difficult to challenge improper foreclosure attempts by big mortgage processors is awaiting President Barack Obama’s signature after it quietly zoomed through the Senate last week.
The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.
The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan and Bank of America…The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
And now, the dirty details of the legislative legerdemain that paved the bill’s path to Obama’s desk:
After languishing for months in the Senate Judiciary Committee, the bill passed the Senate with lightning speed and with hardly any public awareness of the bill’s existence on September 27, the day before the Senate recessed for midterm election campaign.
The bill’s approval involved invocation of a special procedure. Democratic Senator Robert Casey, shepherding last-minute legislation on behalf of the Senate leadership, had the bill taken away from the Senate Judiciary committee, which hadn’t acted on it.
The full Senate then immediately passed the bill without debate, by unanimous consent.
No debates.
No amendments.
No roll call votes.
More:
The House had passed the bill in April. The House actually had passed identical bills twice before, but both times they died when the Senate Judiciary Committee failed to act.
Some House and Senate staffers said the Senate committee had let the bills languish because of concerns that they would interfere with individual state’s rights to regulate notarizations.
Senate staffers familiar with the judiciary committee’s actions said the latest one passed by the House seemed destined for the same fate. But shortly before the Senate’s recess, Judiciary Committee Chairman Patrick Leahy pressed to have the bill rushed through the special procedure, after Leahy “constituents” called him and pressed for passage.
The staffers said they didn’t know who these constituents were or if anyone representing the mortgage industry or other interests had pressed for the bill to go through.
These staffers said that, in an unusual display of bipartisanship, Senator Jeff Sessions, the committee’s senior Republican, also helped to engineer the Senate’s unanimous consent for the bill.
Neither Leahy’s nor Session’s offices responded to requests for comment Wednesday.
Zero Hedge calls it TARP 2. Others aren’t so sure of the bill’s impact. But anger over the corrupted process crosses party lines. Even the GOP House sponsor who initially proposed it to address a court reporter’s concerns was stunned by the speed with which it was shepherded through late last month after years of failed passage.
This stinks.
Will President Obama — Mr. Transparency — sign it? Ask him.
***
Fun fact via Steve Egg: One of the bill’s co-sponsors was none other than big banking buddy…GOP Rep. Mike Castle.
Wisconsinite Steve also notes from the legislative history: “The ‘debate’ in the House consisted solely of three people, one of which was Wisconsin’s own embarrassment Tammy Baldwin (of Madison), urging passage, which was done by voice vote.”
***
Update: The White House has “concerns.”
Uh-huh. Sure, they do…now.
Update: Obama will use his first veto and send the bill back to the House.
Update: Sent back, but not dead:
The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.
Translation: Er, let’s take this up again when no one’s paying attention.
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Bingo! He stopped those rich guy loving Republicans from ‘cheating’ all of those deadbeats. Effective demagoguery.
It was the right thing to do, even if it was ‘only’ protecting the property rights of those ‘horrible’ lenders.
Can I ask how we know DeMint went along with it? (It’s an honest question.)
Dude what is your objection to reasonable validation within due process?
I have a family member who is in danger of foreclosure. If they deserve to be foreclosed on so be it. However, with all of the required notifications, responses, appeals, etc. I want the paper trail to be by the book and verifiable before that family member loses their home.
I find your resposes interesting. You imply at each juncture I am hyper, enraged, etc. I do not represent the other posters. I REPRESENT ME.
Now let’s discuss your posts. You have not answered one of my questions directly nor have you indicated how this bill is consistent with due process and due diligence in the just resolving of a serious legal matter.
This is someone’s home and you are treating it like paying a parking ticket.
I worked in the insurance and insurance software arenas for over 20 years. I am here to tell you that between the Federal laws pertaining to mortgages, mortgage backed securities, home loans, derivatives, federal loan guarantees, etc. the Congress has pretty much screwed up the whole thing into an unrecogizable, out of control mess.
This is just the latest nail hammered in. When it comes to anything dealing with these matters the Congress could fall out of a boat and not get wet.
And you think that they might not “deserve” to be foreclosed on because an i wasn’t dotted or a t wasn’t crossed? Please.
What? The requirements are incredibly complex and lawyers use the complexity to screw lenders. Tell me what borrowers are being screwed by this?
You keep misusing that term.
Why is their home any more important than the lender’s money? Please explain this concept to me.
And all of that has made it more difficult to foreclose.
And none of that has made it more difficult to keep a home.
You want to tell that to my family member and their spouse, who have been trying to find work for 18 months after losing their jobs and who have had their house on the market for over 9 months and no one has even looked at it, because so many homes are for sale or in foreclosure in their area?
They have done everything from work minimum wage to pick up tar balls on the beach trying to get by. Obama has CRUSHED the economy and the housing market in their region.
Yes, corkie I am sure you think they are deadbeats. You fit that mold,
On this point, you and I totally agree. I want to know why somebody can borrow money, have a contract, not fulfill their obligations with respect to that contract and because it’s a “house”, somehow the obligation gets made secondary.
Further, can somebody point to any cases where a bank is foreclosing on a borrower who is current in their payments?
Corkie this is the kind of ridiculous comment that makes having a responable discussion with you an utter waste of time.
We are not discussing a missing comma. We are discussing providing a means for an individual or a business to submit a forged document and having the Congress mandate that that document MUST BE ACCEPTED without review.
Again, no different than the forced loans mandates and voter authentication mandates they have forced on us. Oh, yes and all those mandates on turning a blind eye to documents used by illegals. But then you blew those off. How convenient.
You are no different than Pelosi. You two are just at opposite ends of the scale. Same respect for property rights and due process. ZERO. She wants them all to stay and you want them all evicted.
No, I’d much rather tell them that it’s ok for them to keep living in a house that they can’t afford, regardless of the circumstances, simply because the bank used on out-of-state notary on the loan documents.
I respect their efforts, but their efforts don’t entitle them to a house that they can’t afford.
Obama has crushed the stock market, too. But that doesn’t give someone the right to prevent their broker from making a margin call.
Call me an evil capitalist if you want, but do you really think they should keep that house or be able to make it MORE expensive for the bank to liquidate it?
Did your family member forge their loan documents? Did their bank forge the loan documents?
Actually, VERY DIFFERENT THAN FORCED LOAN MANDATES.
Yes, I’m evil because I want banks to be able to efficiently recover their losses when borrowers don’t repay loans.
Errah maybe Obama can fix it by giving a tax credit to all notaries earning over 250K.
“by unanimous consent”
Obviously, you aren’t up-to-speed with what JP Morgan, BofA, Citi and the other banks were caught doing over the past week (hint: automated doc signing with no human notarized witnesses).
Why don’t we put machines in charge of everything? People are so inefficient and expensive.
What? deadbeats created by Obama? We can’t have that. We need a deadbeat stimulus pronto Tonto. The rich have too much money and their houses are too big. All rich people with extra rooms should be required to take in some deadbeats since they have extra capacity.
Or maybe we just require the rich to pay the deadbeats payments until Obama rights the economy. Remember, it took a long time to end slavery. It will take Obama a long time to end deadbeats, but as they sit around their burn barrels singing rap songs, they know it will happen. And wasn’t this all Bushs fault anyway?
“History teaches us that men and nations behave wisely once they have exhausted all other alternatives”. We have a ways to go. Viva la revolution.
Wow, you really are bob Beckel arent you.
Michelle,
I only have one tiny quibble with your post. You said,
…and while it’s true that Obama has only been president for two years, Democrats have controlled congress for the past FOUR. It may seem a minor point, but its not, it’s a very important point because Democrats themselves are trying to convince Americans that they have only controlled congress for the past two years because they don’t want Americans to hold THEM accountable for the recession that began a year after they took control of congress.
And they were corrupt from the get-go. One example that comes to mind is that they withheld their very first budget, which tripled the deficit (Republicans had been on track to eliminate the deficit), so that President Bush couldn’t veto it, believing that Obama would get elected and would sign it.
But the point is that Democrats want to fool Americans into believing they have only controlled congress for the past two years, AFTER the recession hit, and are therefore cleaning up after Republicans when the truth is that the economy went into recession BECAUSE Democrats won control of congress and were promising massive new taxes, massive new regulation and massive new entitlements.
I only wish Republicans would remind Americans of this important fact in their ads.
I’m not a lawyer, but I’ve read the text of the law several times, and the only thing it says is that courts have to accept an out-of-state notarization. It doesn’t say anything about having to accept fraudulent or erroneous documentation. I think you’re wildly exaggerating the situation. Are you claiming that a court would have to accept a fraudulent or erroneous document if it were notarized within the same jurisdiction as the court? That’s ludicrous.
It should be no problem to override Obama’s veto then, unless the “unanimous consent” was the result of some kind of procedural gimmick like “deem and pass”. I can’t imagine any bill getting unanimous consent in the Senate right now, unless some procedural trick was involved.
Maybe that’s why Pelosi’s not worried about losing her speakership. She may be planning to get the lame-duck session of congress to vote her in as speaker of the house for another two years no matter how the election turns out. We learned from the Obamacare debate that these democrats don’t think there are any constitutional limits on what they can do.
You can’t be Speaker of the House if your party is no longer in the majority! Can you???
Well, not if you actually follow the Constitution, but then again, when was the last time the Democrats actually followed the Constitution?
I don’t think they would get away with that one!! The new republican majority needs to step up to the plate and call them all out on their treason. If they don’t, we must harrass them and continually get in their faces. Let them know they WILL lose their jobs if they don’t get tough with the corruption, the spending and Obamacare!! They are our last hope. If they fail us, they also will be toast.
Must See:
Highly relevant to the topic of this post.
Watch the Beck segment I just linked in my last comment.
If people stop paying their mortgage, and the banks can not foreclose on them, then the banks will stop lending money for new mortgages.
How do you buy a house without a mortgage?
How do you sell a house if prospective buyers can’t get a mortgage?
The whole industry will grind to a halt, and become the subject of another Obama administration takeover.
Is that obvious?
And it’s not black and white. The more difficult the foreclosure process is, the fewer banks will loan.
Well it’s good to see that Beck understands this concept even if too many on here refuse to get it.
Yes, it’s appropriate to compare me to lefty Bob Beckel for my pro-business, capitalist ideas.
Seriously?
I recently benefited for the first ever on the lax banking rules from one of the lenders above who was hosting a three-day no interest special. The car was an internet purchase from a dealer about 250 miles away. My better half took a trailer down to bring it back and then refused to sign any paperwork because [he was clearly cranky] the deal was between the salesman and I. Still, off he drives with the car, carrying the unsigned paperwork. I mailed the signed copies a couple of days later. It’s about time a taxpaying, on-time bill payer gets to reap some of the Democratic goods.
People, have you ever watched It’s a Wonderful Life?
The real world isn’t much different. Yes, some bankers are like Potter – that doesn’t mean the entire industry is evil.
Some bankers are like Jimmy Stewart, but even Jimmy’s Bailey Building and Loan Association would have to foreclose on unpaid loans. Otherwise, he’d be screwing his depositors and all the good people of Bedford Falls.
You need to go read up on what’s been going on with all the mortgage fraud being perpetrated by the big banks.
Its turning out that the mortgages that were supposedly packaged up in REMICS were never officially notarized as per banking law requirements… which means that they were never legally transferred… which means the Banks under contract law may have to refund 100′s of billions of dollars, and may not even have legal standing to foreclose on “their” properties since it has been discovered that many destroyed legal “wet” signature documents.
This is not just a stealth bank bailout, it is an attempt to preserve the big banks after the fraud they knowingly perpetrated is now blowing up in their face to the tune of potentially TRILLIONS OF DOLLARS.
Of course, homeowners may be screwed… but that’s Democrats for you… TAKING THE SIDE OF BIG BUSINESS OVER CONSTITUENTS!
No, it is appropriate to compare you to Bob Beckel because you share his utter and complete contempt for the truth or honesty. The positions you are advocating are not pro business, they are pure Cloward and Pivens strategy.
Who did they commit this fraud against? Who was harmed because the banks signed their own documents in a manner other than that which they should have been signed?
Did some homeowner NOT receive the money they were promised to purchase their house?
Did some homeowner lose their house despite the fact that they had already paid off their loan?
Who was the damaged party in this fraud?
How was a homeowner screwed? Because a bank was allowed to foreclose on an unpaid mortgage despite the fact that the bank forgot to dot an i or cross a t?
Not only have I been 100% truthful, I also actually understand the industry and economics involved with this.
Sure they are, and I understand what this business wants and needs.
And apparently, even Glen Beck understands it, too.
I know all about this. Some of the loan originators may have been cheating the purchasers of the loans.
Usually, when this happens, it’s because the homeowner cheated the originator. This issue doesn’t come into play when honest people purchase homes.
Regardless, no homeowners lost anything because of these inter-bank transactions.
Think about it. Many homeowners find out that their loans have been sold. Do they really need to know the amount the loan was sold for or the representations that were made during the sale? Does it matter?
The fact that you make such assertions doesnt make those assertion true, but then the Bob Beckel in you would make them regardless.
Are you smart enough to challenge the veracity of my assertions?
Are you smart enough to justify your baseless claims that I have “Bob Beckel” in me?
Great article in the Wall Street Journal.
And the best part. (Emphasis mine.)
And finally…
And for those of you that might be wondering, no, I don’t write for the WSJ.
Am I stupid enough to try to prove an negative? No. More importantly, why would I attempt to prove what you have already proven?
The bottom line is simple.
Party a) which would be the Banks entered into a legally binding contract with party b) the home buyer.
In order to exercise a specific option in that legally binding contract (foreclosure) party a) was required by law to follow a specific procedure.
Party a) failed to follow that procedure and then attempted to circumvent that legal requirement.
Party b) in failing to make the agreed payments triggered a series of clauses in the contract, none of which entitled party a) to violate federal lending laws.
Party b) has defaulted on their contract.
Party a) has violated federal lending laws.
HR3808 is a blatant attempt to avoid criminal prosecution, which is also a crime.
No they didn’t. You’re confusing two or three separate situations.
Really? Explain how.
Now you’re just talking out your butt. You are very, very confused about this.
Again, you’ve confused two or three different situations and are now making inaccurate statements.