Bankers Win: No Capitol Hill Action on Mortgage Foreclosure Protection for Two Years


From the Huffington Post today:

Stashed away in a draw somewhere on Capitol Hill is a simple piece of legislation that would have done much to stop the mortgage mess, robo-signing, unfair foreclosures, and the growing claims against lenders. But Congress has not touched the Produce the Note Act since it was first introduced in February 2009 — nearly two years ago.

Now, with this session of Congress drawing to an end, the chance of a hearing, consideration or a vote has dropped to just about zero.

Where’s The Note?

Sponsored by Rep. Marcy Kaptur (D-OH), the legislation would require lenders in a foreclosure situation to identify the actual owner of the mortgage note, the originating mortgage lender and all subsequent loan owners. In other words, in the same way a title search is used to assure that property owners actually have the right to sell a house, the Kaptur bill would require lenders to show they have title to a loan before they can foreclose — a requirement which is supposed to already be part of every foreclosure claim.

This should not be a big deal. After all, we plainly know who originated the mortgage — that would be the lender who sat with you at closing and collected a fee for their work.

And if the loan was sold then surely someone, somewhere has a record showing the date of sale and the purchase price each time the loan was sold and re-sold. After all, we know who owns 100 shares of IBM no matter how many times it has been traded.

Or maybe not. There was, after all, the New Jersey mortgage broker who allegedly took in $11 million by repeatedly selling the same loans to Wall Street.


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