Is HR3808 The Equivalent Of TARP 2 And Obama's "Get Out Of Bail" Gift Card For The High Frequency Signing Scandal?

Tyler Durden's picture

Now that the High Frequency Signing (HFS, not to be confused with HFT) scandal is mainstream, and virtually every single foreclosure in the US in the past several years is under question, with the impact on mortgage servicers (who just happen to be the TBTF banks) could be just as dire as the fallout from the credit crunch, it appears that the get out of jail card for the banking syndicate has once again materialized, this time in the form of bill HR3808: Interstate Recognition of Notarizations Act of 2009, sponsored by Republican representative Robert Aderholt. The bill, it turns out, has passed both congress and senate, and is now quietly awaiting for Obama's signature to be enacted into law. 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.

Reuters explains the situation:

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.

"It is troubling to me and curious that it passed so quietly," Thomas Cox, a Maine lawyer representing homeowners contesting foreclosures, told Reuters in an interview.

The timing certainly is odd. As readers will recall, the event that catalyzed it all occurred on September 16, giving the banking lobby sufficient time to flex its tentacles and get passage enacted quickly and quietly.

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.

It appears the chief culprit for the prompt and clinical Senate passage is one Patrick Leahy and one Jeff Sessions:

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.

As for the bill sponsor, it appears his interest is rather innocuous compared to what may have been a solid 30 pieces of silver before the abovementioned two gentlemen:

The bill was first sponsored by Aderholt in 2006. He told Reuters in an interview that he proposed it because a court stenographer in his district had asked for it due to problems with getting courts in other states to accept depositions notarized in Alabama.

Aderholt said organizations of court stenographers supported the bill, but said he wasn't aware of any backing by banks or other business groups.

Aderholt said that he hadn't expected the Senate to pass the bill, and "we were surprised that it came through at the eleventh hour there."

Unfortunately even if the prompt Senatorial passage of the bill was the bankers' plan all along, they may have shot themselves in the foot by leaving it up to the president to determine if America is now a banker corporatocracy (what some may call a fascist regime), or still a place that believes in laws and regulations, as broken as they may be, in broad daylight. Our sense, is that this bill will not pass, although we have on many occasions in the past underestimated the degree of corruption in this country. On the other hand, should tens of millions of Americans have a crystallized image of one person who in their view will be "responsible" for their inability to pay their mortgage bill on time, then we just may be one step closer to the full societal collapse that many predict will accompany the end of Keynesianism.

The ball is now in the president's court.

h/t Jeff

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Orly's picture

Seems like they have done their research on this one already.  Must have taken some time, huh?  Such efficiency is so rarely seen in the US government.


hedgeless_horseman's picture

This bill looks to have the vaunted bi-partisan support so seldom seen. 

Red team, blue team, they both are part of the same league.  Keep cheering and buying giant foam #1 fingers for "your" team and booing the other team.  Your vote really does make a difference, just like your cheering from the cheap seats at The Big Game.

Orly's picture

The entire charade has smelled of some duplicitous script run for the diversion of Mr. and Mrs. J. S. Pack.  How and when do they have time to write this stuff?  Incredible!

And everyone all together: Bernanke, Posen, Dudley and now that guy from Minnesota, plus Grayson and gang all pulling along the dog before the pony.

Propaganda masters par excellence!

i-dog's picture

"will Obama openly side on behalf of the bankers?"

Ummm ... let's take a vote from former presidents Jefferson, Lincoln, Jackson, Wilson, Eisenhower and Kennedy on this one ... Do I refuse to sign and get assassinated (after which Biden, then Pelosi, will be handed the pen to take the same decision), or do I sign and enact martial law just a year or so earlier than planned? What do you guys think?

[edit] See 'Everyman's post below ... the impact of this bill may not be anywhere as serious as first thought. So he probably won't sign ... and the MSM will praise him!

Indeed, if the bill gets signed, that will reinforce the perjury IN the affidavit rather than diverting the blame onto some hapless/witless notary. Sign it, Barry!

pan-the-ist's picture

I read everyman's comment and the bill.  This bill could fix a small problem in a legal defence that these foreclosure cases hinge on that isn't obvious just yet.  The timing of the bill should call it into question.

Deacon Frost's picture

bi-partisan indeed

Look how the vote was conducted.

Votes: Apr 27, 2010: This bill passed in the House of Representatives by voice vote. A record of each representative’s position was not kept. Sep 27, 2010: This bill passed in the Senate by Unanimous Consent. A record of each senator’s position was not kept. (emphasis added)
MsCreant's picture

At least you know how all the senators voted. 

RockyRacoon's picture

Not so, Missy, or so it is stated in the record:

Apr 27, 2010: This bill passed in the House of Representatives by voice vote. A record of each representative’s position was not kept.   Sep 27, 2010: This bill passed in the Senate by Unanimous Consent. A record of each senator’s position was not kept.

I'll post my comment from another article:

on Wed, 10/06/2010 - 13:07

2) The Mortgage Fraud...

Our "lawmakers" in Congress can fix that with the stroke of a pen.  It won't be pretty nor neat, but they can.   And, rest assured, they'll do it to the advantage of the banks in the objective of "strengthening their balance sheets".

MsCreant's picture

This bill passed in theSenate by Unanimous Consent.

All the senators had to vote yes for this to be true or I am missing your meaning.

Orly's picture

All those present.  As long as a quorum ensued, then the vote is legal.

RockyRacoon's picture

Exactly.   And where is the list of who was present?

knukles's picture

And so now, somebody tell me there ain't no Power Elite.  When these assholes run afoul of their own law, they just dismantle it.

Used to be when I was a kid, most decision making was based upon whether something was Moral or Immoral.  Then it came to pass that alternatives were weighed on whether something was Right or Wrong.   Time goes by and it becomes whether it is Legal or Illegal.   Then it deteriorates to What Can I Get Away With Without Being Caught.  But not having enough degrees of freedom, it slides even further to Nobody's Gonna do Shit About It Anyway or I'll Just Change the Law as it that Applies To Me and Fuck Everybody Else. 

Long ago, wise men commiserated as to the Thin Veneer of Civilisation being damaged.  Now, a Civilised Society based upon the Rule of Law is being Summarily Dismantled by those Vested with the Responsibility to Maintain Such.

End of Game.

Bob's picture

+Fat lady starting to sing.

New_Meat's picture

Knuckles, you are so judgemental.  Get into the 21st Century, will you <\sarc>

- Ned

Xedus129's picture

That's the same way they passed the start of this whole game.. the FED.  Some obscure vote time and a slight of hand

LostWages's picture

Be interesting to see how many "campaign contributions" were made just before the vote.

We still have the best politicians money can buy, including the telepromter in chief.

Lux Fiat's picture

I'll have to add the ability of Congress to pass legislation with no vote traceability to my laundry list of things that Congress should not be able to do.  Of course, I'd like to see Congress subject to every law they have ever passed - no exceptions.  However, I'm not holding my breath.

Makes me wonder if anyone has ever challenged the constitutionality of any law passed this way.  If I can't tell how my elected representatives voted, then as a voter, I don't have any way to determine whether they are representing me.  From my perspective, it's like an intentional abrogation of representative democracy.  Ok, I'm no constitutional scholar or legal expert, but this manuever stinks worse than a skunk.  It's wrong on a moral level, but it would be interesting to know from much more knowledgeable law folks if there is any chance it could be wrong on a legal basis?

midtowng's picture

The bi-partisanship of this bill is the most notable event. People should stop thinking about this as Democrats vs. Republicans, and start thinking about this as the wealthy elite versus the rest of us.

JohnKing's picture

Two party crime syndicate.

Florida Joe's picture

Please withdraw, or provide backup numbers and calculations for your assertion that: "the foreclosure "victims" (granted, the bulk of whom are deadbeat homeowners who should never have owned a home to begin with). "

(i.e. prove you have the backup as to it is a "bulk" of them.) 


Otherwise, I agree that these banks are so powerful they can change the rules AFTER the game so as to never ever lose. If Obama signs it he will lose HUGE.

MachoMan's picture

Maybe I'm missing something here, but isn't it patently obvious that if you are foreclosed upon, you should not have levered so much?

GoinFawr's picture

Good question.

Does this bill merely make it tougher for the above mentioned deadbeats to delay entirely just proceedings by claiming that someone didn't dot all the I's or cross a few T's? Or could it put a fiscally responsible homeowner at risk of being foreclosed upon just because the bank said so?

SWRichmond's picture

The bill requires courts to recognize "lawful" notarizations.  Notarizations signed en masse are not lawful.  The obvious problem, though, would be procing which ones were lawful.  The bill provides cover.  The non-recorded vote provides more cover.  This is criminality at its best and in the open for all to see.

DarkMath's picture

Good point. Although it's kind of like buying your teenage son booze then blaming him for throwing a party, trashing your house and getting your neighbors daughter pregnant when you went away for the weekend.

Is little Johnny really the one to blame?

Xedus129's picture

Haha, I'm sure Johnny Sr. pulled the same stunts

myshadow's picture

saying the 'bulk of them are dead beats', is presumptuous.  There are millions of people who lost their jobs and bought honestly and in good faith.

What you are missing is the antidote for sociopathy.

MachoMan's picture

purchasing "honestly" and "in good faith" speaks nothing to the speculative nature of leverage...  what no one wants to talk about is the fact that taking out credit for homes and education alike is a speculative endeavor...  people are completely ignorant of the risks...

It was presumptuous for them to think they would keep their jobs...  it was presumptuous to think that things were going to stay the same for 30 years...  it was presumptuous to think that they had no alternative to taking debt...

I do recognize that some have been the victims of circumstances not only outside of their control, but outside any reasonable contemplation.  But, I think we disagree as to the weight of these people to the whole...  I believe you are arguing the exception and not the rule.

MachoMan's picture

I also want to add that the concept of the "antidote to sociopathy" is exactly the same perspective that lead to our present socialist nightmare...  or at least the cover to create/perpetuate it.

Jake Lamotta's picture

People of America protect your families and homes.  Stock up in BBB (beans, bullets & bullion).

MikeyKid's picture

This guy is given chance after chance to grow a pair... and caves every time.

Why would this be different?


Millivanilli's picture

Obama is fuckin tv anchor president.   Just like FISA, a bill he claimed he'd filibuster along with sack of shit dodd, he ended up voting yes.   Recently he signed the biggest pentagon bill in the history of our country.   Transparency, ha. He buried Abu Ghraib and other damning documents.  Fuck wad is sorry about giving Guatemalans STD's back in the 40's.   He and Eric holder are simply place mats.  So, on a Friday he'll sign it.  Fuck Obama, the democrats and the republicans.  The whole god damn game is rigged.   

Miss Expectations's picture

This guy is given chance after chance to grow a pair

You mean those devil horns on his head, right?

quasimodo's picture

Game on I have seen it all. Is it possible they could be more blatantly in-our-face on this one? This bill must have got sent in the vaccum tube straight to the oval office for immediate action

Calvin Jones and the 13th Apostle's picture

The good question is why?  The GOP was blocking everything in the Senate, and this passes by unanimous consent?  Which means both parties(at least those crooks in D.C.) were in on this.

rfaze's picture

Maybe the GOP knows it's a loss/loss decision for Obama..... 

SilverIsKing's picture


We have a winner.


Oh, and the repubs are in the banks' pocket too.

Ace Ventura's picture

Constitution Party! Although I admit I like the Libertarian platform as well. Anything but a damn donkey or elephant.

laughing_swordfish's picture

Passed by unanimous consent of BOTH CRIMINAL CARTELS in D.C.

Even the Mexican Narcotraficantes wouldn't have the stones to do something as blatant as this.

If Obummer signs this, he's done - make way for President Biden?

MayIMommaDogFace2theBananaPatch's picture

Passed by unanimous consent of BOTH CRIMINAL CARTELS in D.C.

Isn't it redundant to say BOTH...SAME seems like the better word here.

Cathartes Aura's picture

in answer to your "good question" of why Calvin, given the speed, the "urgency" of passing with unanimous consent. . . well, anyone remember back 2 years when certain congress-critters were "taken aside" and made aware of the threat of "martial law" should they not agree to TARP?

it's short.

buzzsaw99's picture

Hell you knew it was coming. The outright legalization of high level fraud was inevitable.

Spirit Of Truth's picture

Maybe you didn't know.

TBTF has been changed to TBTFW and now means "TO BIG TO F*** WITH".

The banksters own America now and We The People serve at their behest.  Politicians are just the middle men.

Calvin Jones and the 13th Apostle's picture

Why does this bill matter?  Isn't fraud still fraud no matter where the documents were "signed"?

detersbb's picture

That is exactly my point too.  The fact that these documents were noterized not in the presence of the notery is not material, it may be a violation of rule 21(a) or whatever of the Civil Rule of Procedure as is being knowldgeable and reading the documents that you sign, but this is immaterial.


The issue here is the content of what was signed.  Did or did the party named have or not have a legal right to foreclose?  That is the point that matter, nothing besides a default even has legal value.


If it was signed by whoever across state lines, or electronically, big deal.  If the party named to have a right of foreclosure, does not, well, that is fraud and this bill does not legalize fraud.


I read it 3 times to see how this would rebut fraud in the facts sworn and it does not.  If anything this actually helps the case for fraud in that now there is an irrevocable notery that shall be deemed legitimate even if signatures don't match, so there is no defense that this is a bad hoax upon the poor bank.