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October 23, 2017

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Bank of America seeks to overturn freeze on foreclosures

Attorneys for Bank of America moved Tuesday to overturn a court ruling from Nye County blocking foreclosures statewide by Bank of America subsidiary ReconTrust Company N.A.

Ruling in a Jan. 11 lawsuit filed by Pahrump homeowner Suzanne A. North, Nye County District Court Judge Robert Lane on Jan. 20 issued a temporary restraining order and preliminary injunction against ReconTrust, ordering it not to proceed with non-judicial foreclosures in Nevada on behalf of any lender at least until a Feb. 28 hearing.

North had complained in her lawsuit that Bank of America and three subsidiaries defrauded her by wrongfully foreclosing on a Pahrump property in 2009 and tried last year and early this year to wrongfully foreclose on a second property, her home on Bronco Street in Pahrump.

She said ReconTrust filed false papers claiming it had an interest in the Bronco Street home mortgage and that the attempted foreclosure was unlawful because ReconTrust was not licensed to do business in Nevada or the town of Pahrump.

Lane in his Jan. 20 order found: “There is a substantial likelihood that plaintiff will establish at trial that ReconTrust does not have any contractual privities with respect to the contractual relationship between the plaintiff (North) and the other defendants regarding the promissory note and deed of trust.”

He wrote that the temporary restraining order/preliminary injunction was necessary “to prevent the irreparable injury to the plaintiff that would result from the unlawful non-judicial foreclosure being carried out by defendant ReconTrust Company against the plaintiff.”

The state judge noted that North “seeks nothing more than to have defendant ReconTrust Company comply with the statutory requirements of having the appropriate state and local business licenses to conduct business in this state and to property carry out the non-judicial foreclosure process.”

An attorney for Bank of America, ReconTrust and two other B of A subsidiaries, however, moved the lawsuit to federal court in Las Vegas on Tuesday and filed papers indicating the federal court will be asked to find ReconTrust acted properly and doesn’t need to be licensed by state and local governments becasue, as a national bank, it’s exempted from doing so by federal law.

“The provisions of Nevada and local law relied upon by plaintiff and the (Nye County) district court are completely preempted by applicable federal law and regulations pursuant to the National Bank Act,” said Tuesday’s filing by Las Vegas attorney Ariel Stern of the law firm Akerman Senterfitt LLP.

Stern added that a federal judge in Utah confirmed this in a nearly identical case filed there last year.

North said in her lawsuit that after losing one property to foreclosure, in 2009 she ran into more financial problems and contacted Bank of America to seek a modification for her $273,000 Bronco Street mortgage, which she obtained in 2006.

North says she was told nothing could be done because the loan was current, but that if she missed three payments a modification would be possible. North says that at the direction of Bank of America, she did not make payments from August to October 2009.

North says she submitted loan modification paperwork to the bank in November 2009 and made her loan payments through July 2010.

She said codefendant and B of A subsidiary BAC Home Loan Servicing refused to accept her August payment. By this time, she says, four payments had been missed, the three from August to October 2009 and a fourth from November 2009 that she says the bank allowed her to miss because she was submitting modification paperwork.

She says that on Sept. 13, ReconTrust launched the foreclosure process by recording a notice of default and election to sell — but at that time ReconTrust was not trustee of the deed of trust and did not file its substitution of trustee until Sept. 17.

North complained in her lawsuit that ReconTrust was not licensed to do business in Nevada or have a Pahrump business license when it filed the foreclosure papers.

“ReconTrust did not have the legal right to act as trustee under the deed of trust,” North charged in her lawsuit.

The actual trustee she said, was a company called PRLAP Inc. (also a defendant in her suit). She said B of A subsidiary PRLAP was Bank of America’s original 2006 trustee in the mortgage but that PRLAP never provided her with a notice of default.

“The foreclosing defendants engaged in such conduct to drive plaintiff into foreclosure in order that they could acquire the property and any equity in the property at a bargain basement price,” North charged in her suit.

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