A Las Vegas Business Press Article reports that the Nevada Supreme Court passed tougher rules to force lenders to work with homeowners in foreclosure, but some lenders are worried that they may be unfairly sanctioned.
Mediators working with homeowners have the power to find that a lender acted “in bad faith” during a mediation and to halt a foreclosure. The state high court passed its new rules on Sept. 28, in response to a request by state Assembly Speaker Barbara Buckley.
Buckley, D-Las Vegas, said that without the rule changes, lenders might simply go through the motions of showing up for the mediations.
Nobody wants to have a mediation and have a lender say, ‘Oh, there is nothing I can do. I don’t have the authority.’ Or, ‘You have to talk to my loan modification department, or is it my loan mediation department?'” she said.
The court’s rules list the halting of a foreclosure as a sanction for lender bad faith. However, Buckley said judges can impose even stiffer penalties.
“If the lender failed to participate in good faith, it could result in a stop to the foreclosure, or the judge could impose financial sanctions or force a modification,” she said. “Or, it may be that the judge forces the parties back together”.