How The Controversial Foreclosure Bill Made It Through Congress With No Public Debate

How The Controversial Foreclosure Bill Made It Through Congress With No Public Debate

President Obama vetoed a bill yesterday that some homeowner advocates worried would have made it easier for banks to proceed with bogus foreclosures by forcing courts to recognize out-of-state and electronic notarizations.

The bill, titled the Interstate Recognition of Notarizations Act, had glided through the Senate with no public debate and passed by "unanimous consent" on Sep. 27 -- despite the fact that the nation's biggest banks have for the past few weeks been embroiled in a foreclosure scandal spawned in part by their use of bogus notarizations. The bill has been passed by the House three times since 2007, and each time it died in the Senate Judiciary Committee.

Why did the world's greatest deliberative body let it get through this time?

It happened because Calvin Coolidge, the 30th president of the United States, was a notary public from Vermont, according to Judiciary Committee aides.

It all started, the aides said, when committee chairman Sen. Patrick Leahy (D-Vt.) participated in an Aug. 3 "Why Coolidge Matters" event with the National Notary Association at the Library of Congress. "Senator Leahy was so very gracious to carve out some of his time to join us at the Library of Congress event, and we are grateful for his kind words regarding Calvin Coolidge as well as his support of the important roles played by Notaries Public," wrote Michael Robinson, executive director of the National Notary Association, in a Sep. 14 email to Leahy's office. Robinson asked if anyone from Leahy's office would be interested in H.R. 3808, the notarization bill that had passed the House of Representatives by a voice vote in the springtime.

"In September, after hearing from the National Notary Association....Senator Leahy, in consultation with the Committee's Ranking Member, Senator Jeff Sessions, examined the legislation," Judiciary Committee aides wrote in an email. "Having heard no objections from advocates, States or stakeholders, and having checked with the Department of Justice, the bill was discharged from the Judiciary Committee. It was passed with the unanimous consent after every Senate office was notified that it was being considered and there were no objections."

Consumer advocates thought the timing of the bill's passage -- right in the middle of a paperwork scandal that has forced the nation's biggest banks to halt foreclosures -- was awfully suspicious. But not everybody thought the bill itself was very pernicious: "Just because you get a lawful notarization of a bunch of lies doesn't change your ability to challenge an affidavit as a bunch of lies," said Ira Rheingold, director of the National Association of Consumer Advocates.

Max Gardner, a foreclosure defense attorney in North Carolina, isn't satisfied that the bill's passage is owed simply to effective lobbying by the Notary Association. "If Senator Sessions was in any way involved in this matter, then it makes me very suspicious that the mortgage servicing industry was really behind the effort to quietly push this bill through the Congress," Gardner wrote in an email to HuffPost. "Senator Sessions has been the strongest advocate AGAINST allowing consumers to modify first mortgage loans in bankruptcy and against all pro-consumers statutes for that matter. I blame Calvin Coolidge for a lot, but not for this bill."

Sessions' office did not immediately respond to a request for comment.

Michael Robinson told HuffPost he figured Sessions was just doing a favor for the bill's House sponsor, fellow Alabaman Robert Anderholt (R). But both Robinson and staffers for Anderholt have been surprised by how suddenly the Senate passed the bill. "Quite honestly it took us by surprise at the end of September when we got word it had been introduced on the floor of the Senate and was headed to the White House," said Robinson.

The only organization that has ever reported lobbying on the notarization bill is the American Association for Justice, better known as the trial lawyers, which lobbied on the bill back in 2008 (though the accuracy of this portion of Lobbying Disclosure Act reports is dubious, so other interests may have lobbied on it as well). "We worked on aspects of the bill that had nothing to do with the foreclosure crisis, nothing to do with electronic notarization," said a spokesman for the Association.

HuffPost asked Robinson if he had been manipulated by a clever bank lobbyist. He said he had not. "We're just shrugging our shoulders. We're just innocently trying to advance the role of the notary public in interstate commerce. We're a nonpartisan organization that has no sophisticated lobbying arm," he said. "We are quite honestly just amazed at the way the bill has kind of been framed in light of the foreclosure issues that have surfaced over the past several days."

After President Obama vetoed the bill, a Leahy spokeswoman said in a statement that the senator supported the decision. "When Congress passed the legislation, no concerns or objections had been expressed," the spokeswoman said. "Now that concerns have been raised, Congress should reexamine whether this bill might have an unintended impact on foreclosures in the future. We certainly do not believe that is what Representative Aderholt and the other cosponsors of the legislation intended."

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