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Judge overturns order, allows 8,900 Nevada foreclosures to resume

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A federal judge on Monday overturned an order from a District Court judge, allowing foreclosure proceedings to resume on about 8,900 Nevada homes.

Updated Monday, Jan. 31, 2011 | 7:17 p.m.

A Bank of America subsidiary can resume work on thousands of foreclosures in Nevada after a federal judge on Monday dissolved a restraining order against the foreclosures statewide issued by a Nye County District Court judge.

The Nye County order was overturned Monday by Chief U.S. District Judge for Nevada Roger Hunt.

Hunt agreed with arguments by Bank of America that Pahrump homeowner Suzanne A. North has little chance of winning her lawsuit on the grounds that the B of A subsidiary, ReconTrust Company N.A., was not the trustee in her mortgage when it initiated foreclosure proceedings.

A ruling in favor of North by Nye County Judge Robert Lane on Jan. 20 had halted work on more than 8,900 foreclosures in the state.

"Plaintiff’s amended complaint does not show a likelihood of success because this court has repeatedly ruled against claims such as those plaintiff brings," Hunt wrote in his ruling.

"The ever-expanding body of case law within this district (of Nevada) holds that the Nevada law governing nonjudicial foreclosure does not require a lender to produce the original note nor does it require that ReconTrust be substituted as trustee under the deed of trust as prerequisites to non-judicial foreclosure proceedings," Hunt ruled.

He also ruled that Lane's restraining order was invalid since Lane did not require North to post a bond -- a bond that would have satisfied damages to Bank of America from the issuance of the restraining order, should Bank of America prevail in the litigation.

"The state court did not require plaintiff to post a bond, which under Nevada law renders the temporary restraining order void," Hunt wrote in his ruling.

Hunt's ruling appeared to come without a hearing and without attorneys for North filing paperwork opposing Bank of America's motion that the restraining order be dissolved.

John Christian Barlow, North's attorney in St. George, Utah, said he was studying Hunt's ruling.

Barlow confirmed the judge issued the ruling without a hearing. The ruling came before Barlow made an appearance in the case and before Barlow filed any briefs opposing Bank of America's motion that the Nye County restraining order be dissolved.

Barlow said he disagreed with the language in Hunt's order that Nevada law does not require that ReconTrust be the trustee before it can initiate foreclosures.

He said that would mean anyone could file a foreclosure.

"I could file a foreclosure on your house," Barlow said.

The attorney said he hadn't yet decided whether to appeal and was considering how Hunt's ruling may affect his plans to convert North's case -- alleging Bank of America and three subsidiaries fraudulently initiated foreclosure proceedings -- into a class-action lawsuit.

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