President Barack Obama will not sign legislation that could have made it more difficult for homeowners to challenge unjustified foreclosure actions, the White House said on Thursday.

White House communications director Dan Pfeiffer said Obama was sending the bill back to the House of Representatives for further discussion of how it would affect the foreclosure crisis, which has become a political lightning rod amid media reports that banks acted improperly to evict struggling borrowers.

“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,” Pfeiffer said in a blog posting.

White House spokesman Robert Gibbs said earlier that officials were meeting on the bill, which cruised through the Senate last week with no public debate and could have shielded bank and mortgage processors from liability for foreclosure documents that were prepared improperly.

The bill would have required courts to accept all out-of-state notarizations, including those stamped en masse by computers in a practice that critics say has been improperly used to expedite foreclosure orders.

False notarizations figured in disclosures that GMAC, JPMorgan and other big mortgage processors filed false affidavits in thousands of cases, part of the wave of foreclosures that came in the wake of the financial and economic crisis.

The bill, passed by the House of Representatives in April, seemed destined to die with no action on it in the Senate Judiciary Committee. But on September 27, the day before the Senate recessed for the midterm election campaign, it was rushed through and passed by the full Senate.

Passage of the bill caught homeowners’ advocates, including lawyers and some state officials, by surprise.

Ohio Secretary of State Jennifer Brunner said it seemed odd that the law passed just as disclosures of fraudulent foreclosure were mushrooming, leading to widespread halts in foreclosure proceedings.

North Carolina Attorney General Roy Cooper on Wednesday became the latest state official to ask lenders to suspend home repossessions as he probes foreclosure practices.

UNFORESEEN IMPACT

The bill, the Interstate Recognition of Notarizations Act, had received almost no public attention, but stirred controversy once the Senate’s unusually rapid passage of bill became public.

Congressional staffers said many lawmakers and White House officials initially didn’t realize that the bill, which nominally deals only with notarizations, could have big impact on foreclosure cases.

The U.S. Justice Department said on Wednesday it was probing reports the nation’s top mortgage lenders improperly evicted struggling borrowers as a growing chorus of lawmakers on both sides of the aisle demanded investigations.

The mounting political outrage over the U.S. mortgage mess, comes ahead of November congressional elections in which Obama’s Democrats are braced for big potential losses.