President Obama will not sign a bill that could hurt homeowners seeking to challenge mortgage foreclosures, the White House announced Thursday.
At his briefing, spokesman Robert Gibbs said Obama would use a pocket veto to prevent the bill, which passed both the House and the Senate, from becoming law. A pocket veto is when the president refuses to sign a bill.
Designed as a consumer bill, the foreclosure measure could save banks and other mortgage processors from liability in how a foreclosure is processed. Specifically, the bill would broaden the acceptance of notarizations, even those generated by computers.
False notarizations have been an issue for several large mortgage firms. At least three major firms have halted foreclosures in 23 states to review how documents were prepared and filed. The central issue is automatic signing by machine or by humans who scarcely examine the papers.
The Department of Justice recently announced it would look at the practice, which has been sharply criticized by Democrats, who are facing a tough battle to retain control of Congress in this midterm election year.
In using a pocket veto, Gibbs said the White House was worried that the bill could have unintended consequences and would not help consumers as designed. He said the bill would be sent back to Congress.
He also defended the president's action as constitutional.