Beware of Mediation With Pretenders in Nevada

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Editor’s Comment: 

It should come as no surprise that the would-be foreclosers are not creditors, not authorised servicers and are not acting officially in any capacity. They just want another house acquired through a “credit bid” that enables them to get a deed without putting up a dime.

 

If there is any surprise, it is that the report is absurdly low as an estimate of those going to mediation in Nevada without any right to do so and pretending they are lenders which is a crime . And there is precious little understanding that all the other mediations took place under the same cloud. 

 

So a homeowner reaches an agreement with, for example, Bank of America, when in fact BOA doesn’t own the loan, never funded the loan, and is claiming rights to represent investors who don’t know the deal is in the process of negotiation. And of course BOA is claiming the loan is part of a pool serviced by BOA pursuant to what? We already know the loan never made it into the pool so even if BOA was the servicer it still has no right to be at mediation, much less foreclose.

 

Just to be clear, even if they show up with the paperwork doesn’t mean the documents were not fabricated. Quite the contrary. The banks would not be looking for amnesty if the documents were real. The Missouri indictments never would have issued if the documents were real. 

 

All evidence points to a much higher percentage of false claims in support of fraudulent foreclosures. If we took apart each document the way one Arizona sheriff says his department analysed Obama’s birth certificate, we would find that none of the foreclosures of mortgages that were subject to claims of securitization were anything but pure fraud.

A third of the time, lenders don’t have paperwork in foreclosure mediation sessions

By David McGrath Schwartz

Friday, March 2, 2012

The figures appear to provide statistical evidence to support what many homeowners have claimed — that banks aren’t negotiating in good faith to help them stay in their houses.

JP Morgan Chase had the highest rate of noncompliance with the state law. It failed to produce required documents in 52 percent of mediations, which homeowners may request before a bank forecloses. The figures were released Thursday by the state’s Foreclosure Mediation Program.

Bank of America, by far the biggest private lender in Nevada, did not produce the necessary documents 41 percent of the time.

Overall, out of the 3,183 mediations from July 1 to Dec. 31, lenders were missing documents on 1,148 occasions, or 36 percent of the time.

“The noncompliance rate since the beginning of the program has been shockingly high,” said Barbara Buckley, head of the Legal Aid Center of Southern Nevada and the former Assembly speaker who authored the foreclosure mediation bill. “I had hoped by now that the lenders would begin complying.”

Bill Uffelman, president of the Nevada Bankers Association, said “the numbers speak for themselves.”

“The fact that they’re missing required documents, produced somewhere along the life of the loan, indicates insufficient record keeping,” he said.

Representatives of the banks could not be reached after the figures were released.

The state’s Foreclosure Mediation Program started in September 2009 was intended to allow homeowners to sit down with their lender before going through foreclosure. It does not force banks to make any concessions but it does require they do the following:

• Show up at mediation sessions.

• Bring documents, such as a certified copy proving ownership and a chain of title.

• Have the authority to negotiate on behalf of the lender.

• Participate “in good faith,” as determined by the mediator, who is appointed by the Nevada court system.

When the program started, it struggled to get bank representatives to show up at all, said Verise Campbell, administrator of the program. In the last six months of 2011, banks had representatives present in all but 2 percent of mediation sessions.

Despite the large percentage of sessions where banks have not shown up with documents, it is an improvement compared with the early years of the program. Lenders failed to bring documents in 50 percent of the cases during the first two years of the program, Campbell said.

The numbers released Thursday show “improvement, but banks still need to focus on their document compliance,” Campbell said. “It’s clearly the weak link in their compliance.”

The numbers provided the first look at participation by lending institution. In addition to Bank of America and JP Morgan Chase, the report gave the rate of not bringing required paperwork for the following lenders: Wells Fargo, 31 percent; Ally/GMAC, 50 percent; US Bank, 32 percent; Citigroup, 12 percent.

Transparency about which lenders are complying and which ones aren’t could compel those noncompliant banks to produce documents, Buckley said.

The courts could use these statistics to issue fines against banks that fail to comply with the state program, Buckley said.

Lenders who don’t comply with the program “don’t deserve to proceed with foreclosures,” she said.

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