"Produce The Note" Approach Now Required Of Lenders In Nevada Foreclosures Where Homeowner Requests Mandatory Mediation

The Las Vegas Sun reports:

• Homeowners facing foreclosure may have a new friend on their side, if they’re willing to pay for it — a judge. A new state law, signed by Gov. Jim Gibbons and which takes effect in July, allows homeowner-occupants facing foreclosure to demand a sit-down mediation with lenders, overseen by a retired judge or an attorney. It’ll cost homeowners up to $200, but it might help them save their homes.

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• [A]t best for homeowners, the process might stave off foreclosure altogether because of a major technicality. One of the more dramatic components of the foreclosure mediation law compels lenders to produce promissory notes, showing that money is owed, and deeds of trust, showing the banks’ security on the loans. If they can’t, then mediators could reduce the loans significantly, allowing struggling homeowners to stay put. “It’s a basic consumer protection that most states are looking at,” says Assembly Speaker Barbara Buckley, who wrote the bill. “We don’t want people paying mortgages to people who don’t own the mortgage.”(1)

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• Previous to the passage of the Nevada law, lenders here had to file three documents in the foreclosure process: a 90-day notice-of-default and election to sell, a 21-day notice-of-sale and a three-day eviction notice, [...]. Upon receiving the 90-day default notice under the new law, homeowners have 30 days to seek mediation.

For more, see Foreclosure help could hinge on who holds the note.

For a graphic illustration of how promissory notes get "chopped up" in the securitization process, see Why Your Lender May Not Have Your Mortgage Papers.

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) This new law comes on the heels of a recent Nevada bankruptcy court ruling encompassing 27 cases in which Mortgage Electronic Registration Systems, Inc. was prohibited from representing lenders seeking to foreclose on delinquent homeowners already in bankruptcy unless it could produce the actual loan note.

• For the story: Judge's ruling deals blow to national mortgage servicer,
• For the court ruling: In re Mitchell (Chapter 7, Case No. BK-S-07-16226-LBR, Bankr. D. Nv.). EpsilonMissingDocsMtg