In my first blog I discussed how the foreclosure laws can affect us all. In this Blog I will delve into that issue in more depth. I will share how the procedures have changed and the additional steps that a Bank must take before it forecloses on your property.
It has been noted as of late that the number of foreclosures seems to have diminished. While many have opined that this evidences a strengthening of the economy which I hope is true, I would dare to speculate that it also has to do with the passage of AB 284. AB 284 which amends NRS 107.080 and specifically provides that:
“the power of sale must not be exercised until the beneficiary, the successor in interest of the beneficiary or the trustee first executes and causes to be recorded in the office of the recorder a Notice of Default and Election to sell and a notarized affidavit of authority to exercise the power of sale based on personal knowledge and under the penalty of perjury [which contains]
(1) The full name and business address of the trustee or the trustee’s personal representative or assignee, the current holder of the note secured by the deed of trust, the current beneficiary of record and the servicers of the obligation or debt secured by the deed of trust;
(2) The full name and last known business address of every prior known beneficiary of the deed of trust;
(3) That the beneficiary under the deed of trust, the successor in interest of the beneficiary or the trustee is in actual or constructive possession of the note secured by the deed of trust;
(4) That the trustee has the authority to exercise the power of sale with respect to the property pursuant to the instruction of the beneficiary of record and the current holder of the note secured by the deed of trust;
(5) The amount in default, the principal amount of the obligation or debt secured by the deed of trust, a good faith estimate of all fees imposed and to be imposed because of the default and the costs and fees charged to the debtor in connection with the exercise of the power of sale; and
(6) The date, recordation number or other unique designation of the instrument that conveyed the interest of each beneficiary and a description of the instrument that conveyed the interest of each beneficiary”
If this notarized affidavit is not filed and does not contain all of the required information then the owner of the property can bring an action in District Court to stop the foreclosure. If the owner prevails the statute provides that the District Court must award: (a) damages of $5,000 or treble the amount of actual damages, whichever is greater; (b) an injunction enjoining the exercise of the power of sale until the beneficiary, the successor in interest of the beneficiary or the trustee complies with the informational requirements and (c) Reasonable attorney’s fees and costs,
In addition, due to the enactment of the Foreclosure Mediation Program Homeowners of owner-occupied houses have 30 days after being served with a foreclosure notice to elect to participate in mediation. At the Mediation the lender or its agent is required to bring with it the original or certified copies of a whole host of documents. If they fail to do so then the Mediator has the ability to declare that the lender did not participate in good faith and to sanction the lender. Because many of the lenders turned over the documents required to be brought to the Mediation to the Mortgage Electronic Registration System, (MERS), many lenders are having difficulty in obtaining the original or certified copies of the documents. As such, many lenders are not only being sanctioned, but they run the risk of not being able to foreclose.
Because of the FMP as well as the new informational requirements that must be contained in the Notice of Default and Election to Sell, many lenders as well as their trustees are finding that they do not have all of their ducks in a row. Given that these banks now can face potential sanctions and be required to pay attorneys fees and damages, it is my opinion that many of the Banks have elected to halt the foreclosures until they can insure that they will not face these penalties.
If you are facing potential foreclosure and the Notice of Default and Election to sell was filed after October 1, 2011, then it would behoove you to meet with one of the attorneys at Flangas McMillan to see if it was done properly. In the alternative, if you are looking to avoid foreclosure, while the Banks are in a lull, now would be the time to utilize the lull as an opportunity to attempt to modify your loan. Additionally, if the Notice of Default does contain all of the necessary information, the attorneys at Flangas McMillan can represent you in the Mediation.
In the end what is plain is that the Banks no longer have all of the power. The power is now in your hands. You just need an educated attorney to advise you as how to best utilize the tools at your disposal.
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