Beacuse of the sloppy documentation, the banks may now technically be unable to foreclose on many of the absurd loans they made. Edge mortgage holders.
Or at least it still is edge mortgage holders, but likely not for long. President Obama who has shown a total disrespect for the rule of law and the sanctity of contract (see what he did to the debt holders of the auto compnaies) appears to be about to overule contract law, again.
It will, of course, be to the benefit of banks who not only made dumb loans, but didn't get the proper documentation for the loans. It will screw the homeowners who will be tossed out of homes that technically, by law, the banks shouldn't be able to toss out because of the poor documentation.
Here's what the President in cahoots with Congress is up to, according to Reuters:
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.
Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.
The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
The White House said it is reviewing the legislation...
Ohio Secretary of State Jennifer Brunner told Reuters in an interview that the law would weaken protection of homeowners by requiring many states to accept lower standards for notarizations.
She said it was "suspicious" that the law unexpectedly passed just as the mortgage industry is facing possible big costs from having filed false or improperly notarized documents.
Notarizations are made by notaries licensed by individual states. The purpose of notarizations is to attest to the identity of the person whose signature is on a legal document.
For affidavits -- sworn statements filed in court cases -- the person who made the affidavit also is required to swear under oath before a notary that the affidavit is true.
In recent depositions in several foreclosure cases, GMAC and other mortgage processors' employees have testified that they signed large numbers of affidavits without ever appearing before the individuals who notarized them.