Turn On The Lights, Watch The Roaches Scatter, Part 11

OK.  Now things are getting really, really interesting.  Turns out that before Congress left town, the Senate immediately fast-tracked a bill that the House had passed some time ago, but was sitting in committee.  The Senate put the bill on the floor and passed it by unanimous consent with no debate and no warning.  The bill, the "Interstate Recognition of Notarizations Act," was designed to be one of those little things that make things easier, in this case recognizing notarized documents between states. 


You know, notarized documents like, say, foreclosure paperwork.

See where this is going?

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.

So again, what would this law do?   I'll let Tyler take it from here.

In summary, the bill requires all federal and state courts to recognize notarizations made in other states. That's the theoretical definition: the practical one - the legislation, if enacted, could protect bank and mortgage processors from liability for false or improperly prepared documents. In other words, with one simple signature Obama has the capacity to prevent tens of billions in damages to banks from legal fees, MBS deficiency claims, unwound sales, and to formally make what started this whole mess: Court Fraud perpetrated by banks, a legal act, and to finally trample over the constitution. Will Obama do it?

Potentially - the banking lobby certainly has enough power over him and his superiors, the members of the FOMC. On the other hand, the populist revolt that will surely follow the enactment of such a law will certainly end any dreams of a second term, and potentially of a completed first one. The drama is now on: will Obama openly side on behalf of the bankers (without a "blame the republicans" fall back this time) or of the foreclosure "victims" (granted, the bulk of whom are deadbeat homeowners who should never have owned a home to begin with). We doubt a decision will be reached before the midterms, although quite a bit now hangs in the balance. 

This law would in effect correct the interstate part of the foreclosure fraud mess and leave the banks free and clear.  The lower standard on notarizations means the states would have to accept the robo-signed foreclosure documents as legitimate.  It would eliminate liability from the banks.

They would get away with it.  And all Obama would have to do is sign the bill into law to make it happen.  It's already on his desk.

We'll see how this goes.