WASHINGTON » President Barack Obama has rejected a bill that the White House fears could worsen the mounting problems caused by flawed or misleading documents used by banks in home foreclosures.

White House press secretary Robert Gibbs said yesterday that Obama is sending a newly passed bill back to Congress to be fixed because the current version has "unintended consequences on consumer protections." The bill would loosen the process for providing a notary’s seal to documents and allow it to be done electronically.

Obama will not sign a bill that would allow foreclosure and other documents to be accepted among multiple states. Consumer advocates and state officials had argued the legislation would make it difficult for homeowners to challenge foreclosure documents prepared in other states.

The White House said yesterday it is sending the bill back to Congress for revisions and that the administration would work with lawmakers on it.

O. Max Gardner, a consumer lawyer in Shelby, N.C., said the bill would have made the problems with foreclosure documents worse. That is because mortgage companies would have been able to mass-produce documents and affix a digital version of a notary’s seal rather than one on paper.

"They could process more foreclosure cases with improper and invalid documents and make it more difficult for consumers to try to fight," he said.

Obama used a rare "pocket veto" — a tactic for killing a bill that can be used only when Congress is not in session. It essentially takes effect when the president fails to sign a bill within 10 days. Obama has yet to issue a traditional veto during his presidency; he has used a pocket veto once before, in December, to address what amounted to a technicality on a defense spending bill.

A furor has been growing as mounting evidence has surfaced that mortgage lenders have been evicting homeowners using flawed court papers. State and federal officials have been ramping up pressure on the mortgage industry over concerns about potential legal violations.

Also yesterday, Senate Majority Leader Harry Reid, D-Nev., urged five large mortgage lenders to suspend foreclosures in Nevada until they have set up systems to make sure homeowners are not "improperly directed into foreclosure proceedings." Nevada is not among the states where banks have suspended foreclosures.

Attorney General Eric Hol-der said Wednesday that the government is looking into the issue. Earlier in the week, House Speaker Nancy Pelosi and other Democratic lawmakers urged bank regulators and the Justice Department to investigate whether mortgage companies violated any laws in handling foreclosures.

Three banks have halted some foreclosures in 23 states, including Hawaii, after evidence surfaced that their employees or outside lawyers signed documents without reading them or filed inaccurate paperwork.