Robert Noggle of Black and Lobello Law has written another great blog post about the mandatory mediation law. Here's what he said:

The Nevada Supreme Court held a public hearing on June 25 at the Las Vegas Justice Center on proposed rules for the mandatory mediation program for homeowners in foreclosure.  The mandatory mediation program is effective on July 1 and applies to owners of primary residences who receive a Notice of Default (NOD)from their lender beginning on that date. The recording of the NOD begins the foreclosure process.

Chief Justice Hardesty stated that there would be a future hearing on requirements for a finding of lender bad faith and the sanctions to be imposed.  He also stated that the new law does provide two objective standards concerning lender good faith.  The first is that the lender must be represented at the mediation by someone with authority to modify the loan; the second is that the representative must bring the required documents to the hearing.  Barbara Buckley, the bills sponsor, was quoted as saying that a lack of good faith on the lenders part would result in a halt of the foreclosure process.  The mediator expressly has authority to modify the loan upon a finding of lender bad faith.

There was a lengthy discussion concerning who will be appearing on behalf of the lender and what authority they will have.  One Justice proposed that where an investor is involved the servicer obtain a power of attorney from the investor in order to represent the investor. Buckley stated that it was the legislative intent that the investor who had the right to payment on the note be at the mediation hearing.  The proposed rules do require that the lender provide copies of all note assignments.  Buckley stated she wants to ensure that the homeowner is paying the ultimate holder of the note.  One comment was made that the Nevada legislation does not provide immunity to the servicer from the investor when negotiating a loan modification, unlike California law.

Buckley also stated that it was the legislative intent that the lender bring originals or court certified copies of the deed of trust and note.  This elicited the observation that there was no way to obtain an official certified copy of the note since it was not recorded.  Buckley stated it would be insufficient for the lender to self certify the copies.

Buckley and other speakers emphasized the importance of the lender bring their loan modification methodology to the hearing for the mediators evaluation.

This was in response to one attorneys comment that lenders decline modifications for not meeting their guidelines but will not disclose what those guidelines are.

A spirited discussion also occurred about the requirement of a recent appraisal for the evaluation of a short sale.  What will be considered sufficiently recent will be a topic for additional discussion.

Robert B. Noggle

Attorney at Law

10777 West Twain Avenue, Suite 300

Las Vegas, Nevada 89135

Ph:    702.869.8801
Fax:   702.869.2669

rnoggle@blacklobellolaw.com

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