Nevada Foreclosure Defense Attorney Seeks $1M In Bankster Sanctions For 'Contemptuous' Bad Faith Approach To State's Mandatory Mediation Program

In Reno, Nevada, the Las Vegas Review Journal reports:

• The Nevada Supreme Court altered the foreclosure mediation landscape in dramatic fashion earlier this month when, in two separate cases,(1) justices made it clear lenders must follow two simple rules -- bring all relevant documents to the table and make sure someone with loan modification authorization is readily available.



• A homeowner's lawyer in one of those cases, Terry Thomas of Reno, plans to test the waters Monday by asking Washoe County District Judge Patrick Flanagan to impose a $1 million fine against a banker who a mediator found acted in bad faith.



• "Lenders were saying the rules were not really mandatory," said Thomas, who represents about a dozen homeowners facing foreclosure in the Reno area. Now, lenders have been forewarned that the rules are not optional, and the two Nevada judges who review failed mediations have been put on notice that they must sanction lenders who fail to strictly comply with those rules.

***

• Thomas said the high court's rulings send an unmistakable message to lenders, but homeowners who can't afford to file an appeal "are screwed," he said, making it all the more important for district judges to hold lenders accountable when they fail to abide by the program. Mosley and Flanagan will have to start enforcing the law, "or lenders will continue to scoff at the system," Thomas said.



• He said the $1 million sanction he seeks is not aimed at a lender whose noncompliance is minor, but rather one who exhibited contempt for the program, and by extension the state Supreme Court, which created the foreclosure program following the 2009 legislative session. The lender, whom he did not identify, skipped two mediation sessions.



• "My clients just get stonewalled," Thomas said. "They are already in financial peril, and they pay thousands of dollars just to get to a mediation, and the lender doesn't care about the rules. This does real harm to real people."

For more, see Lenders feel pressure in foreclosure process.

(1) See:

• Leyva v. National Default Servicing Corp., 127 Nev. Adv. Op. No. 40 (Nev. July 7, 2011);


• Pasillas v. HSBC Bank USA, 127 Nev. Adv. Op. No. 39 (Nev. July 7, 2011).

For a short commentary on these cases, see Credit Slips: Nevada Supreme Court: You Gotta Prove Chain of Title.