State Supreme Court Finding Flaws in Some Foreclosure Filings

Vegas Inc.
July 10, 2011

Homeowners Emiliano and Yvete Pasillas brought a claim against HSBC Bank USA, Power Default Services, and American Home Mortgage Servicing Inc. in Washoe County. The Nevada Supreme Court sided with the homeowners sending a message to banks trying to foreclose on homeowners: “Follow the rules, or forget about foreclosing and face sanctions.”

When the homeowners attempted to save their homes through the state’s foreclosure mediation program, the lenders failed to provide the right documentation or send an individual with the authority to settle in the mediation. The court held, “Because (state law) and the Foreclosure Mediation Rules expressly require that certain documents be produced during foreclosure mediation and that someone with authority to modify the loan must be present or accessible during the mediation, we conclude that a party’s failure to comply with these requirements is an offense subject to sanctions by the District Court.”

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