Las Vegas Sun

September 3, 2015

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Sun Editorial:

New law should give homeowners greater assurance against abuses

Nevada Attorney General Catherine Cortez Masto said her office has fielded plenty of complaints about the foreclosure crisis, including many in which homeowners are questioning the fairness of the process.

Nevada has been at the epicenter of the nation’s foreclosure crisis, and it has also seen a rash of foreclosure fraud. Cortez Masto said her office has seen several cases in which forged, incomplete or false documents were allegedly used, allowing financial institutions to take homes away from the people who had bought them.

State law doesn’t require a judge to sign off on foreclosures — as is the case in some other states — and some Nevadans have found themselves scrambling to find basic information about what is happening in their foreclosures.

A bill passed by the Legislature this year should help. Assembly Bill 284 will tighten the foreclosure process, increasing the requirements of lenders planning to foreclose. It takes effect next month.

In a meeting with the Las Vegas Sun’s editorial board on Monday, Cortez Masto and Assembly Majority Leader Marcus Conklin, a primary sponsor of AB284, said the law would protect the integrity and transparency of the process.

Conklin said one key area addressed in the bill is “robo-signing” — bank officials, lawyers and notaries signing off on documents without really knowing what’s in them. The law will put an emphasis on lenders having all of the proper documents in place and doing things correctly.

As things are, third parties that deal with foreclosures but don’t own a property — including banks that service mortgages, attorneys, notaries and foreclosure processors — often have an incentive to work quickly. That has left room for incomplete or wrong paperwork, not to mention fraud.

Cortez Masto said her office has been investigating claims that officials and notaries were signing blank documents that would be filled in later. There are also complaints that people preparing the documents are making realistic-looking forgeries, including cutting and pasting signatures on a computer, to speed up the process, she said.

The new law will require that a person trying to foreclose on a property sign an affidavit with key information on it and have it recorded in the county where the property is. It also will require that documents used in foreclosures be recorded. That should help homeowners get information that hasn’t always been easy to obtain.

The law will also give the attorney general’s office a greater ability to go after mortgage fraud cases and will increase penalties for the use of fraudulent documents in a foreclosure.

This is a good law. For a homeowner, foreclosure can be devastating, and the reports of abuse are reprehensible. It’s important that it’s done correctly, not fraudulently, and giving the attorney general the ability to aggressively prosecute fraud should help.

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