Obama to reject notarization bill

The bill was passed by acclamation by the Senate Sept. 27 and by the House in April. More controversial than when it was proposed by Rep. Robert Aderholt, R-Ala., the bill has gained attention as major U.S. lenders, including Bank of America and JPMorgan Chase, have suspended foreclosures in states that require a judge's review due to a growing controversy over flawed paperwork.

Many of the flaws include notarized signatures on documents that were signed before the documents were complete. Other paperwork appears processed in a foreclosure "mill" where signatures are put on unread documents.

"The president will not sign H.R. 3808," White House spokesman Robert Gibbs told reporters. "Our concern is unintended -- the unintended consequences on consumer protections, particularly in light of the home foreclosure issue and developments with mortgage processors. So the president is exercising a pocket veto, sending that legislation back to Congress to iron out some of those unintended consequences."

In September, Aderholt said the bill "will help businesses around the nation by eliminating the confusion with arises when states refuse to acknowledge the integrity of documents out-of-state," The Wall Street Journal reported. However, a spokesman for the congressman's office said, "Contrary to some blogs and reports, there is absolutely no connection whatsoever between Congressman Aderholt's legislation and the recent foreclosure documentation problems."

Business advocates say the bill would streamline a process that has become overwhelmed by the housing crisis. Other say the bill, called the Interstate Recognition of Notarizations Act of 2009, would make stack the odds against consumers in court.

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