The following platform was contributed by a Son of Liberty who wishes to be referred to as Cloud9.

H.R. 3808 Official Summary

4/27/2010--Passed House without amendment. Interstate Recognition of Notarizations Act of 2010 - Requires each federal and state court to recognize any lawful notarization occurring in or affecting interstate commerce which is made by a notary public licensed or commissioned under the laws of a state other than the state where the court is located.

 

Requires such a notarization to:

1)   use a seal of office as symbol of the notary public's authority; or

2)   have the seal information, in the case of an electronic record, securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.  

 

This bill passed both houses and will apparently be allowed to become law without the President's signature. 

Argument

The purpose of HR 3808 was to legalize the notary bank fraud operations that were churning out false affidavits in the foreclosure crisis.  The fact that congress cannot agree on a budget but can agree on legalizing fraud speaks to the rotten core of this government. 

http://www.businessinsider.com/the-latest-from-foreclosure-gate-obama-is-planning-to-accidentally-pass-hr-3808-2010-10

Let's say in 2005, you found the perfect little house for $100,000.  You went down to the local bank to secure a mortgage to purchase the house.   The bank agreed to loan you $100,000 at 5.36% over a period of thirty years.  Your principal payment would be $100,000 and your interest payment would be $101,254 over the span of the thirty year note.  Your principal and interest payments would be divided into 360 equal payments of $559.05.

Had the bank kept your mortgage in house, it would have collected $6,708.60.   Most of that would have been interest under the loan agreement.  From the banks perspective this is good money but it is not fast money.   So, very early on, banks found that they could sell their performing mortgages to mortgage companies taking their profit up front.   Then the mortgage companies packaged these mortgages up and sold them as long term investments to pension funds.

Some really bright guys stepped forward and suggested that no single investor should take the hit should you default.  So the decision was made to deconstruct your mortgage and sell pieces of it to potential investors like your pension fund.  Then if you defaulted each investor would lose a small portion of this overall investment.

But then the banks got greedy.  They started selling $300,000 houses to college students with no job giving them adjustable rate mortgages.   By rolling part of the interest into the principal every month the students were able to make their house payments with student loans.

Since they were making regular payments their mortgage was put in the blinder with your mortgage and packaged up and sold to your pension fund as a triple A investment.

The insiders knew this was a house of cards and would ultimately explode. Credit Suisse even had a chart so they positioned themselves to make money off of the coming collapse.  They bet on the failure of the loans they themselves had originated. 

To make all this work, they needed a fairly sophisticated program to puree and package these mortgages.  MERS (Mortgage Electronic Recording System) was created to cover the handling of the slicing and dicing of these mortgages.  On the very simplest level MERS functioned as a tax evasion device by slipping past the county recording requirements.  The original mortgages and accompanying paper were destroyed somewhere in the process as the loans were digitized.  http://www.mersinc.org/Foreclosures/index.aspx

Some say this was done to hide fraud others say it was a cost cutting practice.  Whatever the reason, the destruction of these documents severed the chain of transfer of property.  Property law is hundreds of years old and requires wet documents to prove ownership.  The problem arose when foreclosures began to pop up and the banks as servicers of these notes discovered they needed the documents they or their agents had destroyed to press their claims of foreclosure.  The decision was made to have document mills create affidavits that asserted that the documents had been lost but had been seen and verified by the persons signing the affidavits. The affidavits were then submitted to courts as proof of ownership.

The affidavits were so sloppily done that it became evident to even the bottom quartile of civil servants that these documents were forgeries.  What made them forgeries was the simple fact that the notaries notarizing these documents had never witnessed the signatures that appeared on the forms they were notarizing.  This criminal act on the part of the notaries made all the claims of foreclosure placed before the courts fraud upon the courts and would simply cause the claims to right of foreclosure to be rejected with prejudice by the courts.

Realizing the problem lay with the fraudulent notarizations, the banks had congress formulate HR3808.  http://www.govtrack.us/congress/billtext.xpd?bill=h111-3808
Essentially, HR3808 said that all states must recognize all notarizations from other states, that affect interstate commerce (read every notarization), so long as the notarization was appropriate in the state in which it originated. 

It would take a lot of time to research all 50 states' notarization laws.  However, it is understand that some states have very liberal notarization laws.  The incentive would be for banks/mortgage servicers to move their notary operations to states with more lax laws and then force those notarizations upon state courts where the same notarizations would be otherwise improper.  This could be done very easily, the banks/mortgage servicers would just set up a small office and hire two employees who could then generate mass improper notarizations, partially solving the current mortgage debacle.

The following remarks are taken from an article in Money Morning:  http://www.marketoracle.co.uk/Article23522.html

 

"Congress, in its inimitable way, was made aware of this problem. Legislators tried to solve the problem by ramming through - without debate (highly unusual, but they did it) - legislation that partly addressed some of the notary issues."

 

"In a bill that was supposed to facilitate interstate commerce, our elected representatives made it legal for notarizations to be accepted across state lines. How high up is the knowledge of this crisis? Apparently pretty high. After all, it was none other than U.S. Sen. Patrick Leahy, D-V T, the chairman the Judiciary Committee, who on Sept. 27 rammed through the Interstate Recognition of Notarizations Act, the bill in question."

 

"In case you miss the egregious irony of the timing of the bill, it came up for a vote only a couple of weeks after the initial disclosure in courts around the country that GMAC had robo-signers falsely notarize foreclosure documents. Last Thursday, U.S. President Barack Obama refused to sign the bill. "

 

Author:  Cloud9