President Obama will not sign bill that would affect foreclosure proceedings

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With concern over foreclosure practices growing nationally, the White House said Thursday that President Obama would not sign a bill that critics said could loosen the standards for home repossessions.

The president will not sign the Interstate Recognition of Notarizations Act of 2010, which was designed to facilitate interstate commerce, and will send the bill back to Congress for revisions.

‘We believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized,’ White House communications director Dan Pfeiffer wrote on the White House’s blog. ‘The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.’

According to the Associated Press, consumer advocates and state officials have said the bill would make it harder for homeowners to challenge foreclosure documents that are prepared in other states.

Also on Thursday, major civil-rights groups, including the National Assn. for the Advancement of Colored People and La Raza, called for a national moratorium on foreclosures. They made their announcement, along with the consumer-advocacy group the Center for Responsible Lending.

The concerns over foreclosure practices come after J.P. Morgan Chase, Ally Financial Inc.and Bank of America Corp. halted foreclosures in 23 states where courts have jurisdiction over the foreclosure process. The self-imposed moratoriums do not apply in California, where the vast majority of foreclosures do not require a court order.

-- Alejandro Lazo