Elizabeth Warren Rescued Americans From Early Foreclosure

Elizabeth Warren as head of the Consumer Financial Protection Bureau sometimes seems too good to be true–a mirage of a superwoman setting up a forcefield between average Americans and Wall Street.

Only, she is real! And as one of her first acts, she saved countless Americans from early foreclosure and potential bank paperwork fraud.

In October, Congress passed a bill that would have made it easier–and quicker–for banks to process paperwork, streamlining the foreclosure process and making homeowners more vulnerable.

The bill, which passed both houses of Congress and awaited President Obama's signature to become law, essentially would have compelled notaries to accept out-of-state notarizations, regardless of the rules in those states.

State officials across the country--who have been pursuing probes looking into wrongdoing within the foreclosure process-- feared that those jurisdictions with lax standards could have become hotbeds for foreclosure documentation fraud. Lenders and mortgage companies could have used those states as central clearing houses to produce bogus foreclosure paperwork, and then export those documents to other states with more stringent regulations--an expedient bypass around the strictures.

Warren was among the first to scrutinize the bill's specifics, and after meeting with attorneys general from six states who shared her concern, she conveyed the problems to top administration officials. Obama ultimately declined to sign the bill into law, citing its potential “unintended impact” on consumer protections.

Notarizations are important for a large range of documents, including financial documents.  As the President has made clear, consumer financial protections are incredibly important, and he has made this one of his top priorities, including signing into law the strongest consumer protections in history in the Wall Street Reform and Consumer Protection Act.  That is why we need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors.

Since Warren has helmed the agency, she's not only met with countless state officials and fellow consumer advocates, but also lobbyists, investors and executives from the world's biggest banks–counter to the Republican CW that the administration is anti-business. For a full account of Warren's actions since September, check out The Huffington Post.

AlterNet / By Julianne Escobedo Shepherd

Posted at November 27, 2010, 5:15am

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