Las Vegas Sun

April 27, 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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  1. "I have a solution. Make your mortgage payments then the frauds will disappear."

    acejoker -- are you in the habit of making payments to people you don't owe? That's what you're suggesting here.

    "If you're going to take my house away from me, you better own the note." -- Joe Lents (who hasn't made a payment on his $1.5 million mortgage since 2002) in Bloomberg's 2/22/08 "Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish"

  2. "I always knew who to pay, how much and when. If fraud is still happening then that is a separate issue."

    acejoker -- the underlying obligation, the Note, is subject to a lot more than just the notices you get in the mail. Who sends those notices and who you actually owe are not always the same thing, which underscores the importance of knowing where's the Note and who's its Holder. Fraud is rampant -- that's the point here.

    "Why don't the banks want us to see the paperwork on all these mortgages? Because the documents represent a death sentence for them..... in America, it's far more shameful to owe money than it is to steal it." -- an article from the November 25, 2010 issue of Rolling Stone by Matt Taibbi "Courts Helping Banks Screw Over Homeowners"

  3. How does this law deal with the problem of false affidavits? People can record pretty much anything as long as it is in the proper form. If somebody lies in the affidavit and records it, a house can still be foreclosed and sold. If it is sold to a 3rd party who does not know of the error, the former owner is out in the street with no recourse. Trying to prosecute some clerk for perjury is not a remedy because they will just point back up the chain claiming they reasonably believed what they stated in the affidavit because they relied on information they believed was accurate.

    Many states allow someone with an interest in real property to record a request for notice of recording of any document concerning their property. It costs something, but it is cheaper than waking up to an Eviction Notice.

  4. There still needs to be some help for homeowners who have consistently made payments, but need to have the payment amounts reduced, due to the recent BUDGET CUTS which have led to salary steps not increasing pay which helps a person keep up with inflation with all the other costs of living. Spending a year to fight for a reduction and getting a $20 break is BS. Hopefully something can be done about that.

  5. Its real hard to tell who is more corrupt in all of this.

  6. acejoker -- you'll find most of your answers in NRS 104 Article 3. A good start would be

    "...I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -- Thomas Jefferson in his May 28, 1816, letter to John Taylor

  7. "Does not change my view that to keep up payments on the notes..."

    acejoker -- not what you said originally. The mortgage and the Note are two completely different things.

    "The note is the cow and the mortgage the tail. The cow can survive without the tail, but the tail cannot survive without the cow." -- the late Professor Chester Smith of the University of Arizona College of Law, as cited in Restatement (Third) of Property, Mortgages 5.4, Reporters' Notes

  8. "KillerB, give iit up. Your lack of knowledge is appearant."

    acejoker -- the only thing "appearant" here is your ignorance and lack of a spellchecker.

    You'll notice the quote from the late Professor Smith is from the Restatement series, making it a lot more valid than your naked opinion. I know exactly what a Note is and how different it is from the deed of trust/mortgage/security instrument meant to secure the maker's performance. It's been well-settled law for centuries a Note by itself is actionable.

    Bask in your ignorance -- I'm finished educating you.

    "[The law] has placed the collective force in the service of those who wish to traffic, without risk, and without scruple, in the persons, the liberty, and the property of others; it has converted plunder into a right, that it may protect it, and lawful defense into a crime, that it may punish it." -- Frederic Bastiat, 1850 "The Law"