President Obama has intervened in a controversial foreclosure bill, amid growing anger over the proposed new law. The little-know bill was causing a political furor because if enshrined in law, critics say it would make it easier to evict struggling homeowners.
While Congress passed the bill without debate, Obama stepped in to veto it after members of his party have urged him to properly address the issue, and growing crisis, of inconsistent foreclosure procedures.
Attorney Generals from around 40 states have promised to work together to investigate the thousands of reports of fraudulent documents and illegal practices such as banks seizing properties despite not having a clear ownership of the mortgage.
There are at least 10 states that are looking to extend a voluntary freeze on foreclosure proceedings from some of the country’s largest lenders, to include more financial institutions and also more regions. On top of this calls are increasing for a national moratorium on foreclosure proceedings. If enacted, this would halt the sale of thousands of properties, impacting heavily on the profits of big banks.
The financial institutions at the heart of the furor are also taking a beating from election candidates, who are keen to weigh in on the matter amid a politically charged election season.
The vetoes bill was an act enabling electronic statements to be used across state borders in foreclosure cases, but as more and more news came to light of bungled paper trails in foreclosures, the bill became a worry – relying on electronic notaries would inevitable allow more fraud in the system.
