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Court wants nonprofit group to pay almost $1 million to review foreclosure records

Underwater mortgages

Sun file photo

The number of Nevadans who are underwater on their mortgages is down, but only because many have lost their homes to foreclosure, a report says.

Costly disclosure

KSNV coverage of foreclosure mediation records, Nov. 19, 2011.

Foreclosure Mediation Under Fire

The state's Foreclosure Mediation Program is under fire from different angles. A Reno judge is deciding one lender's claims that it violates the separation of powers. While Wells Fargo is challenging that same Reno judge's right to modify a borrower's mortgage. Plus, we hear from the woman behind the mediation program, former Assembly Speaker Barbara Buckley.

CARSON CITY — A group seeking to evaluate the state’s foreclosure mediation efforts has been told it will be charged nearly $1 million to review records of the negotiations between banks and homeowners.

Civil Rights for Seniors, a California nonprofit group, wants access to the records to see how cooperative banks have been and to independently verify how successful the mediation program is.

The state argues privacy is key to the program’s success: If people believe information they present could become public, some might not participate.

But that has led to accusations that the public can’t hold the state, or banks, accountable.

As the two parties fight in court over whether the information can be made public, an attorney for the state’s foreclosure mediation program informed Civil Rights for Seniors that it would cost $940,000 for the state to review, redact and copy thousands of pages related to the program.

“Like any mediation, where disputed claims might be settled, we want to preserve the confidentiality of the parties,” attorney Alicia Johnson said in a statement. Johnson works for the Allison MacKenzie law firm, which provides legal counsel to the Foreclosure Mediation Program. “To preserve the confidentiality ... can be costly, particularly when the records requests involves thousands of documents.”

Phil Olsen, the attorney for Civil Rights for Seniors, said access to the records is “important so we can tell how common it is for banks to fail to participate in good faith. How often do they (banks) fail to attend? How often do they fail to bring the right paperwork? Which banks are the culprit?”

Olsen said the documents will have homeowners’ names and property information — which is already public if the bank is trying to foreclose on their home, he said — but not personal financial information presented at mediation.

He has been critical of the program, and said he doubts officials’ claims about its effectiveness.

“The law provides for public access to information in order to verify it independently,” he said. “We’re not going to take the program’s word for it, and the law says we don’t have to.”

The mediation program, established by the Legislature in 2009, is run by the Nevada Supreme Court’s administrative office.

Click to enlarge photo

This is a copy of the letter Alicia Johnson sent to Phil Olsen regarding a request by Civil Rights for Seniors to look into the state's foreclosure mediation program.

Document

State law allows an agency “to charge a fee for extraordinary use of its personnel to fulfill a public records request,” Johnson said in a letter to Civil Rights for Seniors.

The agency estimates it would cost $1 per page to copy, redact and research, and estimates an average wage of $16 an hour for a state worker carrying out the task. The nonprofit group has requested an estimated 600,000 documents.

Public agencies have charged for access to records, but nothing this large, according to Barry Smith, executive director of the Nevada Press Association, who called the fee “outrageous.”

“Attaching that kind of outlandish number to a public document is a way to discourage people from even asking for public documents,” Smith said.

For comparison, the Nevada Policy Research Institute, a libertarian think tank, was charged $894 to obtain Speaker John Oceguera’s payroll records. Clark County School District charged NPRI about $1,600 for salary, benefits and expense information for top school district officials.

Between September 2009 and June 2011, more than 12,000 homeowners had completed the mediation process, according to the program.

Of those mediations, 11,057 did not result in foreclosure, the program said. In 3,686 cases, homeowners were allowed to stay in their homes, according to officials.

Olsen said he believes the program is not as successful as officials claim because lenders aren’t cooperating, and the mediators are not authorized to issue fines to lenders for acting in bad faith.

Olsen had been a mediator for the program but was fired for recommending uncooperative banks be fined, he said.

Former Assembly Speaker Barbara Buckley, who wrote the legislation creating the program, said the agency should publish statistics showing which banks’ cooperate and which do not.

In 2011, the Legislature passed a bill that would have required such reporting, but Gov. Brian Sandoval vetoed the bill.

Buckley said she believes the program will soon start publishing that information voluntarily.

“The most helpful data to be released is information, by lender, of what they’re willing to do, and what they’re not willing to do,” Buckley said. “Are they working in good faith or not?”

Buckley, who sits on the advisory panel for the program, said, “in terms of releasing individual homeowners specific information, I think that goes too far. I don’t see a good reason to release file-specific information.”

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