Nevada Foreclosure Laws Has Virtually Stopped All Foreclosure?

The new laws in Nevada just got passed only last month and it has miraculous effect already on our rapid foreclosure. New default notices were way down last month in Las Vegas (116 or so) and foreclosure filings in Nevada plunged in October during the first month of a new state law. Only more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by ForeclosureRadar.com, a real-estate website that tracks such filings.

As you may know, Nevada’s state Assembly passed a measure that took effect on Oct. 1, 2011 designed to crack down on “robo-signing,” where bank employees signed off on huge numbers of legal filings while falsely claiming to have personally reviewed each case. This new law makes it a felony—and threatens to hold people criminally liable—for making false representations concerning real estate title. There are civil penalties of $5,000 for each violation. The good thing is that the new legislation has almost stopped foreclosure.

The bad thing is that the banks would have glut of homes which it cannot dispose off easily. The surplus homes would create problem for everyone including the banks, homeowners, and of course the local economy. The continuous auctioning of these properties were a capitalistic action which should not be stopped for any convenience. Again, if banks are at fault, the homeowners have not done justice with their contracts as well. Many of the delinquencies are deliberate and intentional. These “walks-aways” should be punished. Everyone should be made responsible for their actions or inactions. Furthermore, it may tempt many people to be intentionally delinquent on their homes. They may avoid taking care of these homes because they had no attachment. Possibly, they may not pay the HOA dues. Now, we have homeowners living in these homes, and still not taking care of their property. The problem with delinquency, and dependency (as you may see with immigrants coming from Communist countries, who get government housing, ration, jobs etc) that they do not strive enough to make their justified living when they come to US. Unfortunately, this dependency is taught in USA creating road blocks to the capitalistic system. We are unfortunately heading towards a socialistic economy. We should not forget that we live in a capitalistic society and should not help greedy and needlessly protect greedy and non law-abiding people. Of course, we are creating a massive delinquent homeowners society who had scant regard of their promissory notes, contracts, and ethical agreements. These folks always shift the accusation on someone else. They have not done anything wrong according to them. All the wrongs were done by their lenders, servicers. This is a very bad way to handle the recovery on homes. This would create the height of lack of accountability. Even though we had supported homeowners (and always would do) but the unintended result of this law would have a terrible effect on the banks and the general restoration of our economy.

What should have been done?

A simple solution which of course would not need the congressional approval (as they have the tendency to mess up everything) would be to encourage banks to refinance the mortgage of everyone regardless of the appraisal or the FICO score. Come on! FICO cannot be upright, everyone’s credit had taken too many hits in this struggling economy. It is difficult to keep your heads above water. So the basic solution is following:

1. Give refinance to every homeowner or at least the choice of it on the current interest rate. No one should be denied

2. No penalties, or fines of any kind.

3. Ignore FICO

4. Ignore appraisal. It is gimmick. (May be a drive by appraisal can be used)

4. This refinancing would generate plenty of business for lenders, brokers, loan agents, appraisers, home construction specialists etc. It would rejuvenate our markets. Every one would be busy and make money. This is the only solution towards restoration of our economy. I hope Mr. Obama would be listening. Mr. Obama can also fire his treasury secretary along with housing secretary. They have proven to be nincompoop. I personally think these folks are playing the same role what Dan Quayle had done for George Bush’s (Sr.) in his relection campaign. (he was the biggest hurdle in his reelection)

More Foreclosure in Nevada and Continuous Robo-Signature Controversy

We have been stressing throughout this foreclosure ordeal in Nevada that there is something more messier then what is visible on the face (prima facie). WE are witnessing more bad news as JPMorgan Chase halted 56,000 foreclosures amid doubts that it had correctly followed laws on the foreclosure process. This news came soon after the announcement from GMAC Mortgage when suspended an undisclosed number of foreclosures to gain time to check its legal procedures. Now, Bank of America has announced similar measures. No one cared for this before the bubble as that was the notorious days for “no doc”, “low-doc” loans. Unfortunately, same spirit was shown in creating rapid foreclosures by mass production of these forged signatures, and foreclosure default notices and avoidance of states notice laws. After the bubble, banks, mostly large banks had consistently applied all kinds of tactics to frustrate federal government help in denying loan modifications of all sorts by either straight denial, or by hiring incompetent people, not supporting enough telephone lines or asking too much and needless paperwork. Now we learn that foreclosures, the end of the mortgage pipeline, have also been handled with a disregard for rules and standards. Here, we can see nothing but a continuous pattern of ineptness and incompetence. At issue now are affidavits that a foreclosing lender must file in many states’ courts. The person signing the affidavits attests to having knowledge of important facts, like the lender’s legal standing to foreclose and the amount owed. But in a rush to process hundreds of thousands of foreclosures, it turns out that the signers at Chase and GMAC processed 10,000 or more documents a month — “robo-signing” in industry parlance — without personal knowledge of the facts. They were like signature machines affixing their signatures on thousands of documents without testing its reliability or authenticity.

We can not satisfy ourselves that hundreds and thousands of families have lost their homes while legal process was denied to them by these rob signature machine production of documents. Now, most of these crooked banks had stopped this process but what about people whose homes has already been foreclosed and their credit tarnished for the rest of their lives. Let us hope that banks learn some lesson. Some 700 or more of them had already closed, and some of them are still teetering on the brink of a disaster, but of course they never learn. To the extent the suspensions ensure a process that is legal and fair, they are to the good. But delays feed uncertainty, and that could be bad for the economy. Will they result in fewer foreclosures, helping to prop up prices? Or will they create a backlog of foreclosed homes that will push prices down when they come to market?

As we know that the central weakness in the administration’s antiforeclosure efforts is that participation by lenders has been voluntary. Banks should be advised to have their participation mandatory. The robo-signing scandal is yet another reminder that it is folly to rely on banks that got us into this mess to get us out. The Obama administration needs to revise its ways to help people. It would be good to fire Treasury secretary at this time. That would revive some of the lost expectations of Obama administration. 18 months is too long to have some teeth in the administration hands to curb this rising trends of foreclosure in Nevada. A recent article published in NY Times indicates how bad the economy is in Nevada at this time.
http://www.nytimes.com/2010/10/03/us/03vegas.html?hp

Even TV covering the foreclosure crisis

Economic crisis is deepening in our everyday life, and even the big celebrities of TV are showing the signs of this omnipresent depression. The sitcom depicts and discusses this crisis often and celebrities are taking part-time jobs. Here is an interesting article just published. As usual the law office of Malik Ahmad www.fastbankruptcynevada.com is willing to help its clients and offer them free bankruptcy consultation.

http://www.nytimes.com/2009/03/12/arts/television/12plot.html?_r=1

What is debt forgiveness, and its implications

If you owe a debt to someone (lenders) else and they cancel or forgive that debt, the canceled amount may be taxable.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.

We have simplified the legislation and the following are the most commonly asked questions and answers about “The Mortgage Forgiveness Debt Relief Act” and debt cancellation:

What is Cancellation of Debt?
If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.

Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.

Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
These exceptions are discussed in detail in Publication 4681.

What is the Mortgage Forgiveness Debt Relief Act of 2007?The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does exclusion of income mean?Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?
No. The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million if married filing
separately.

Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?
Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. For more information, including an example, see Publication 4681.

How long is this special relief in effect?
It applies to qualified principal residence indebtedness forgiven in calendar years 2007 through 2012.

Is there a limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?
The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven. If the balance was greater, see the instructions to Form 982 and the detailed example in Publication 4681.

If the forgiven debt is excluded from income, do I have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on Form 982 and this form must be attached to your tax return.

Do I have to complete the entire Form 982?
No. Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.

Where can I get this form?
If you use a computer to fill out your return, check your tax-preparation software. You can also download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please allow 7-10 days for delivery.

How do I know or find out how much debt was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2009. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982.

Can I exclude debt forgiven on my second home, credit card or car loans?
Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion. See Publication 4681 for further details.

If part of the forgiven debt doesn’t qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the insolvency exclusion. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent. You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982. Publication 4681 discusses each of these exceptions and includes examples.

I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
No. Losses from the sale or foreclosure of personal property are not deductible.

If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?
Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is $600 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt canceled. However, you may be able to exclude part or all of this income if the debt was qualified principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case. An exclusion is also available for the cancellation of certain nonbusiness debts of a qualified individual as a result of a disaster in a Midwestern disaster area. See Form 982 for details.

If the remaining balance owed on my mortgage loan that I was personally liable for was canceled after my foreclosure, may I still exclude the canceled debt from income under the qualified principal residence exclusion, even though I no longer own my residence?
Yes, as long as the canceled debt was qualified principal residence indebtedness. See Example 2 on page 13 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.

Will I receive notification of cancellation of debt from my lender?
Yes. Lenders are required to send Form 1099-C, Cancellation of Debt, when they cancel any debt of $600 or more. The amount cancelled will be in box 2 of the form.

What if I disagree with the amount in box 2?
Contact your lender to work out any discrepancies and have the lender issue a corrected Form 1099-C.

How do I report the forgiveness of debt that is excluded from gross income?
(1) Check the appropriate box under line 1 on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to indicate the type of discharge of indebtedness and enter the amount of the discharged debt excluded from gross income on line 2. Any remaining canceled debt must be included as income on your tax return.

(2) File Form 982 with your tax return.

My student loan was cancelled; will this result in taxable income?
In some cases, yes. Your student loan cancellation will not result in taxable income if you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation.

Are there other conditions I should know about to exclude the cancellation of student debt?
Yes, your student loan must have been made by:

(a) the federal government, or a state or local government or subdivision;

(b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or

(c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization.

Can I exclude cancellation of credit card debt?
In some cases, yes. Nonbusiness credit card debt cancellation can be excluded from income if the cancellation occurred in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See the examples in Publication 4681.

How do I know if I was insolvent?
You are insolvent when your total debts exceed the total fair market value of all of your assets. Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts.

How should I report the information and items needed to prove insolvency?
Use Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to exclude canceled debt from income to the extent you were insolvent immediately before the cancellation. You were insolvent to the extent that your liabilities exceeded the fair market value of your assets immediately before the cancellation.

To claim this exclusion, you must attach Form 982 to your federal income tax return. Check box 1b on Form 982, and, on line 2, include the smaller of the amount of the debt canceled or the amount by which you were insolvent immediately prior to the cancellation. You must also reduce your tax attributes in Part II of Form 982.

My car was repossessed and I received a 1099-C; can I exclude this amount on my tax return?
Only if the cancellation happened in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See Publication 4681 for examples.

Are there any publications I can read for more information?
Yes.
(1) Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals) is new and addresses in a single document the tax consequences of cancellation of debt issues.

(2) See the IRS news release IR-2008-17 with additional questions and answers on IRS.gov.

US Sues Big Mortgage Giants

http://dealbook.nytimes.com/2011/12/16/s-e-c-sues-6-former-top-fannie-and-freddie-executives/?hp

NV Attorney General Announces Arrests of Two Robo Signers

OFFICE OF THE ATTORNEY GENERAL
Catherine Cortez Masto, Attorney General
555 E. Washington Avenue, Suite 3900 Las Vegas, Nevada 89101
Telephone – (702) 486-3420
Fax – (702) 486-3283
Web – http://ag.state.nv.us
FOR IMMEDIATE RELEASE Contact: Jennifer Lopez
DATE: November 16, 2011 702-486-3782
OFFICE OF THE ATTORNEY GENERAL ANNOUNCES INDICTMENT IN MASSIVE
CLARK COUNTY ROBO-SIGNING SCHEME
Defendants to be Held Criminally Accountable for Filing Tens of Thousands of
Fraudulent Foreclosure Documents
Carson City, NV — The Office of the Nevada Attorney General announced today that the Clark County grand jury has returned a 606 count indictment against two title officers, Gary Trafford and Gerri Sheppard, who directed and supervised a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008.
According to the indictment, defendant Gary Trafford, a California resident, is charged with 102 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor). The indictment charges defendant Gerri Sheppard, also a California resident, with 100 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person
not in the presence of a notary public (a gross misdemeanor).
“The grand jury found probable cause that there was a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008,”said Chief Deputy Attorney General John Kelleher.
The indictment alleges that both defendants directed the fraudulent notarization and filing of documents which were used to initiate foreclosure on local homeowners.
The State alleges that these documents, referred to as Notices of Default, or “NODs”, were prepared locally. The State alleges that the defendants directed employees under their supervision, to forge their names on foreclosure documents, then notarize the signatures they just forged, thereby fraudulently attesting that the defendants actually
signed the documents, which was untrue and in violation of State law. The defendants then allegedly directed the employees under their supervision to file the fraudulent documents with the Clark County Recorder’s office, to be used to start foreclosures on homes throughout the County.
The indictment alleges that these crimes were done in secret in order to avoid detection. The fraudulent NODs were allegedly forged locally to allow them to be filed at the Clark County Recorder’s office on the same day they were prepared.
District Court Judge Jennifer Togliatti has set bail in the amount of $500,000 for Sheppard and $500,000 for Trafford. The case has been assigned to Department 5 District Court Judge Carolyn Ellsworth who will preside over the case.
Anyone who has information regarding this case is asked to contact the Attorney General’s Office at 702-486-3777 in Las Vegas or 775-684-1180 in Carson City.
TRAFFORD, GARY
SHEPPARD, GERRI
###

Here Comes Warning to Banks for Wrongful Foreclosure

The highest court in Massachusetts ruled that U.S. Bancorp and Wells Fargo erred when they seized two troubled borrowers’ properties in 2007, putting the nation’s banks on notice that foreclosures cannot be based on improper or incomplete paperwork.

The Supreme Judicial Court voided the foreclosures, returning ownership of the properties to the borrowers and opening the door to other foreclosure do-overs in the state. However, this decision did not set any precedent for other courts, however, this is still a good decision and other lenders should be warned. The case dates to 2007, when Wells Fargo and U.S. Bancorp began foreclosure proceedings against delinquent borrowers on two separate properties. Neither borrower fought the proceedings — the courts in Massachusetts are not obligated to oversee foreclosures — and both banks quickly seized the properties.

The banks’ problems began in the fall of 2008, when Wells Fargo and U.S. Bancorp sought judgments from the Massachusetts Land Court that would have given them clear title to the properties. In 2009, the court rejected the banks’ arguments, ruling that the banks had not been assigned the mortgages before they foreclosed, as is required. Instead, the banks had acquired the mortgages after they had begun foreclosure proceedings.

Foreclosures are supposed to occur only when lenders can prove they own the note underlying the property. While it is common now for borrowers to question whether banks moving to seize their properties have the right to do so, in 2007, most borrowers assumed that the institutions foreclosing on them were acting properly.

Since then, lenders’ foreclosure practices have come under intense scrutiny. Borrowers’ advocates have argued that lenders flouted private property rights in their rush to foreclose on troubled borrowers. As lenders and Wall Street firms bundled thousands of mortgage loans into securities, banks often failed to record each link in the chain of documents demonstrating ownership of a note and a property.

As our readers are well aware, attorneys general in all 50 states are investigating foreclosure improprieties, which include forged signatures on legal documents and other dubious practices meant to patch up holes in loan documentation. Both mortgages in the Massachusetts case had been bundled into securities and sold to investors. The banks that foreclosed on the borrowers were acting as trustees, bringing the actions on behalf of investors in the trusts, which held the properties at the time of the ruling.

Fed Sues Allied Home Mortgage Over Bad Loans

The Associated Press has reported that the federal government sued one of the nation’s largest privately held mortgage brokers on Tuesday, saying its decade-long lending practices amounted to fraud and cost the government hundreds of millions of dollars and forced thousands of American homeowners to lose their homes.

The lawsuit in United States District Court in Manhattan sought unspecified damages and civil penalties and named as defendants Allied Home Mortgage Corporation; its founder, Jim Hodge; and Jeanne Stell, the company’s executive vice president and director of compliance.

This was announced by Preet Bharara, the United States attorney based in Manhattan. “The losers here were American taxpayers, and the thousands of families who faced foreclosure because they were could not ultimately fulfill their obligations on mortgages that were doomed to fail,” he said.

According to the lawsuit, nearly 32 percent of the 112,324 home loans originated by Allied from Jan. 1, 2001, to the end of 2010 have defaulted, resulting in more than $834 million in insurance claims paid by HUD.

The lawsuit said the default rate climbed to “a staggering 55 percent” in 2006 and 2007, at the height of the housing boom, when the government paid $170 million to settle Allied’s failed loans. It said an additional 2,509 loans are now in default and that HUD could face $363 million more in claims.

Obama New Help Plan for Homeowners–Just a Joke?

There are headlines throughout USA and in all the media about Obama’s new mortgage plan announced in Las Vegas about refinancing of underwater homes but today’s record-low mortgage rates are out of reach for millions of U.S. homeowners who would benefit from them most. The fact of the matter is that one in four homeowners with a mortgage is under water. 11 million people – owe more than their home is worth. Almost 60 percent of the home owners are underwater, if not more. However, the Obama administration is hoping at least 1 million of these borrowers will take advantage of its refinancing program under more lenient rules unveiled Monday. Let us see the important points of this program:

1. Homeowners who are current on their payments will be eligible to refinance no matter how much their home’s value has dropped.

2. This program only applies to loans which are financed by Fannie Mae and Freddie Mac.

3. This refi can be more than 125 percent value of the home.
4. This refi is available to only those homeowners who are current in their payments.

Demerits of this Plan:
This plan ignores the reality of non payments, and applies to very small segment of homeowners. There are approximately 3782 loans in Las Vegas which are financed either by Fannie Mae or Freddi Mac. According to the Clark County assessor’s office, Fannie Mae and Freddie Mac own 3,782 properties in Southern Nevada, out of 631,783 residences. I am just shocked how this administration after months of wrangling, pussyfooting came to this bogus plan which would do no meaningful changes in the plight of homeowners. A realistic plan could have opened refinancing for all the underwater homes. This would have created a revitalization of the economy in matters of months as everyone including the real estate, the loan brokers, the banks, the home construction industry, the brick layers, the carpet guys, the Home Depot, and all other who are associated with home industry would have been benefitted. Shocingly, this is a bad advice, and would bring very little result. We are disappointed on these half hearted measures.

More Foreclosure: When it is going to stop?

More bad news coming about foreclosure filings as it rose in August, as more homebuyers fell behind on their mortgage payments.The new statistics shows that filings were up 7% compared to July, but were still 33% lower than they were a year ago — marking the eleventh straight month of year-over-year declines, according to RealtyTrac, a leading online marketer of foreclosed properties. According to the report, 228,098 homes in the U.S. received some kind of foreclosure filing in August. Default notices, which typically initiate the foreclosure process, surged more 33% from July. Foreclosure auctions and bank repossessions, which come later in the process, both fell slightly.

The lenders did take a pause after the “robo signing” last year but now they are increasing the pace of forelcosure again. We had stated that the recovery of economy depends upon the recovery of housing market. Sometime ago NY Times reported that Obama administration is working on a plan to give refinancing option to home owners who would not otherwise qualify for refinancing on the lowest interest. But we had not heard more details on this program so far. Unfortunately, our judicial system is clogged by thousands of complaints, lawsuits involving lenders, homeowners and brokers. This seems to be an unending crisis, and presently we do not see any light at the end of the tunnel. Obama administration is gearing up for the second election, and his Treasury Secretary is a hopeless person. Once there was a rumor of his resignation, the market briefly rose but came back to negative again, when he denied resigning from this post. Too me, he is like Dan Quayle with the Senior Bush. The senior Bush did not want to get rid of him, and eventually lost election.

The Whistleblowers Get Rewarded: Good Work

US Department of Labor finds Bank of America in violation of Sarbanes-Oxley Act whistleblower protection provisions. Here is the good news as Bank is ordered to reinstate fire employee employee and pay $930,000. This interesting story is new, and came from San Francisco where it has found Charlotte, N.C.-based Bank of America Corp. in violation of the whistleblower protection provisions of the Sarbanes-Oxley Act for improperly firing an employee. The bank has been ordered to reinstate and pay the employee approximately $930,000, which includes back wages, interest, compensatory damages and attorney fees. The findings follow an investigation by OSHA’s San Francisco Regional Office, which was initiated after receiving a complaint from the Los Angeles-area employee.

“It’s clear from our investigation that Bank of America used illegal retaliatory tactics against this employee,” said OSHA Assistant Secretary Dr. David Michaels. “This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same.”

The employee originally worked for Countrywide Financial Corp., which merged with Bank of America in July 2008. The employee led internal investigations that revealed widespread and pervasive wire, mail and bank fraud involving Countrywide employees. The employee alleged that those who attempted to report fraud to Countrywide’s Employee Relations Department suffered persistent retaliation. The employee was fired shortly after the merger.

“Whistleblowers play a vital role in ensuring the integrity of our financial system, as well as the safety of our food, air, water, workplaces and transportation systems,” added Michaels. “This case highlights the importance of defending employees against retaliation when they try to protect the public from the consequences of an employer’s illegal activities.”

Both the complainant and Bank of America can appeal the monetary damages to the Labor Department’s Office of Administrative Law Judges within 30 days of receiving the findings.

OSHA enforces the whistleblower provisions of the Sarbanes-Oxley Act and 20 other statutes protecting employees who report violations of various airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health care reform, nuclear, pipeline, public transportation agency, railroad and maritime laws. Under these laws enacted by Congress, employers are prohibited from retaliating against employees who raise various protected concerns or provide protected information to the employer or to the government. Employees who believe that they have been retaliated against for engaging in protected conduct may file a complaint with the secretary of labor to request an investigation by OSHA’s Whistleblower Protection Program. Detailed information on employee whistleblower rights, including fact sheets, is available at http://www.whistleblowers.gov.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to ensure these conditions for America’s working men and women by setting and enforcing standards, and providing training, education and assistance. For more information, visit http://www.osha.gov.

New Nevda Legislation Regarding Deficiency Judgment

We take pride in updating our clients and general readers about all the current trends in legislation in the state of Nevada. The following is the latest bill in this regard. It is just reproduced only for reading purposes and not meant for any specific advice. Please see your local counsel in your specific jurisdiction for specific questions. Please be warned that this is a very long post, and lots of that is still not clear to many attorneys including us.

Assembly Bill No. 273—Committee on Commerce and Labor
CHAPTER……….

AN ACT relating to real property; revising provisions governing the amount which a person holding a junior lien on real property may recover in a civil action under certain circumstances; prohibiting certain persons holding a junior lien on certain residential property from bringing a civil action under certain circumstances; revising provisions governing the amount of a deficiency judgment after the foreclosure of a mortgage or a deed of trust; limiting the amount – of certain judgments against guarantors, sureties or other obligors of obligations secured by real property under certain circumstances; revising provisions governing mortgages and deeds of trust; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:
Under existing law, a judgment creditor or a beneficiary of a deed of trust may obtain, after a hearing, a deficiency judgment after a foreclosure sale or trustee’s sale if it appears from the sheriff’s return or the recital of consideration in the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due the judgment creditor or beneficiary of the deed of trust. Existing law requires a judgment creditor or beneficiary of a deed of trust to bring an action for such a deficiency judgment within 6 months after the foreclosure sale or trustee’s sale. For an obligation secured by a mortgage or deed of trust on or after October 1, 2009, a court may not award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if: (1) the creditor or beneficiary is a financial institution; (2) the real property is a single-family dwelling and the debtor or grantor was the owner of the property; (3) the debtor or grantor used the loan to purchase the property; (4) the debtor or grantor occupied the property continuously after obtaining the loan; and (5) the debtor or grantor did not refinance the loan. (NRS 40.455)

Sections 3, 3.3 and 5.7 of this bill enact similar provisions to govern deficiency judgments sought by junior lienholders after a foreclosure sale, a trustee’s sale or any sale or deed in lieu of a foreclosure sale or trustee’s sale. Section 3 provides that, if the circumstances prohibiting a deficiency judgment after a foreclosure sale or trustee’s sale under current law exist with respect to a junior lienholder, the creditor may not bring a civil action to recover the debt owed to it after a foreclosure sale, a trustee’s sale or a sale or deed in lieu of a foreclosure sale or trustee’s sale.Existing law authorizes a creditor under an obligation secured by a junior mortgage or deed of trust to bring an action to obtain a personal judgment against the debtor only if the action is commenced within 6 years after the date of the debtor’s default. (NRS 11.190) Under sections 3.3 and 5.7 of this bill, if the real property securing such an obligation is the subject of a foreclosure sale, a trustee’s sale or a sale or deed in lieu of such a sale, the creditor may bring an action to obtain a personal judgment against the debtor only if the action is brought within 6 months after the foreclosure sale, the trustee’s sale or the sale in lieu of a foreclosure sale or trustee’s sale.

Under existing law, the amount of a deficiency judgment after a foreclosure sale or a trustee’s sale may not exceed the lesser of: (1) the amount of the indebtedness minus the fair market value of the foreclosed property at the time of the sale; or (2) the amount of the indebtedness minus the amount for which the foreclosed property actually sold. (NRS 40.459) Section 5 of this bill provides that, for a deficiency judgment sought by a secured creditor after a foreclosure sale, trustee’s sale or sale in lieu of a foreclosure sale or trustee’s sale, the amount of the deficiency judgment must be reduced by the amount of any insurance proceeds received by, or payable to, the creditor. Section 2 of this bill enacts a corresponding provision for money judgments sought against a debtor by a junior lienholder after a foreclosure sale, a trustee’s sale or a sale or deed in lieu of a foreclosure sale or trustee’s sale.

Sections 2 and 5 also limit the recovery of a creditor who acquired the right to obtain payment for an obligation secured by the real property from another person who owned that obligation. If the creditor is seeking a deficiency judgment after a foreclosure sale, a trustee’s sale or a sale in lieu of a foreclosure sale or trustee’s sale, section 5 provides that the creditor may not receive an amount which exceeds the lesser of: (1) the consideration paid for the obligation minus the fair market value of the property at the time of the foreclosure sale, with interest from the date of sale and reasonable costs; or (2) the consideration paid for the obligation minus the amount for which the property actually sold, with interest from the date of sale and reasonable costs. If the creditor is a junior lienholder who filed a civil action to obtain a money judgment against the debtor, section 2 provides that the creditor may not receive an amount greater than the consideration paid for the obligation, with interest from the date on which the person acquired the right to obtain payment and reasonable costs.
Section 5.5 of this bill limits the amount of a judgment against a guarantor, surety or other obligor, other than a mortgagor or grantor of a deed of trust, in an action commenced before a foreclosure sale or trustee’s sale to enforce the obligation to pay, satisfy or purchase all or part of an obligation secured by a mortgage or other lien on real property. Under section 5.5, the amount of the judgment may not exceed the lesser of: (1) the amount of the indebtedness minus the fair market value of the real property at the time of the commencement of the action; or (2) if a foreclosure sale or a trustee’s sale is completed before the date on which judgment is entered, the amount of the indebtedness minus the amount for which the foreclosed property actually sold.

Section 6 of this bill provides that the amendatory provisions of: (1) sections 1-3 apply only prospectively to obligations secured by a mortgage, deed of trust or other encumbrance upon real property on or after the effective date of this bill; (2) sections 3.3 and 5.7 apply only to an action commenced after a foreclosure sale or sale in lieu of a foreclosure sale that occurs on or after July 1, 2011; and (3) section 5.5 apply only to an action against a guarantor, surety or other obligor commenced on or after the effective date of this bill. Under section 7 of this bill, the amendatory provisions of section 5 become effective upon passage and approval and thus apply to a deficiency judgment awarded on or after that effective date.
Section 6 of Assembly Bill No. 284 of this session requires the trustee under a deed of trust to be: (1) an attorney licensed in this State; (2) a title insurer or title agent authorized to do business in this State; or (3) a person licensed as a trust company or exempt from the requirement to be licensed as a trust company. Section 5,8 of this bill amends section 6 of Assembly Bill No. 284 of this session: (1) to authorize any foreign or domestic entity which holds a current state business license to be the trustee under a deed of trust; and (2) to specifically describe certain persons who are exempt from the requirement to obtain a license as a trust company and who are authorized to be the trustee under a deed of trust. Sections 5.9 and 5.95 of this bill change the effective date of Assembly Bill No. 284 of this session from July 1, 2011, to October 1, 2011.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Chapter 40 of NRS is hereby amended by adding thereto the provisions set forth as sections 1.2 to 3.3, inclusive, of this act.
Sec. 1.2. As used in sections 1.2 to 3.3, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 1.4, 1.6 and 1.8 of this act have the meanings ascribed to them in those sections.
Sec. 1.4. “Foreclosure sale” has the meaning ascribed to it in NRS 40.462.
Sec. 1.6. “Mortgage or other lien” has the meaning ascribed to it in NRS 40.433.
Sec. 1.8. “Sale in lieu of a foreclosure sale” means a sale of real property pursuant to an agreement between a person to whom an obligation secured by a mortgage or other lien on real property is owed and the debtor of that obligation in which the sales price of the real property is insufficient to pay the full outstanding balance of the obligation and the costs of the sale. The term includes, without limitation, a deed in lieu of a foreclosure sale.
Sec. 2. 1. If a person to whom an obligation secured by a junior mortgage or lien on real property is owed:
(a) Files a civil action to obtain a money judgment against the debtor under that obligation after a foreclosure sale or a sale in lieu of a foreclosure sale; and
(b) Such action is not barred by NRS 40.430, 60 in determining the amount owed by the debtor, the court shall not include the amount of any proceeds received by, or payable to, the person pursuant to an insurance policy to compensate the person for losses incurred with respect to the property or the default on the obligation.
2. If (a) A person acquired the right to enforce an obligation secured by a junior mortgage or lien on real property from a person who previously held that right;

(b) The person files a civil action to obtain a money judgment against the debtor after a foreclosure sale or a sale in lieu of a foreclosure sale; and
(c) Such action is not barred by NRS 40.430,
6* the court shall not render judgment for more than the amount of the consideration paid for that right, plus interest from the date on which the person acquired the right and reasonable costs.
3. As used in this section, “obligation secured by a junior mortgage or lien on real property” includes, without limitation, an obligation which is not currently secured by a mortgage or lien on real property if the obligation:
(a) Is incurred by the debtor under an obligation which was secured by a mortgage or lien on real property; and
(b) Has the effect of reaffirming the obligation which was secured by a mortgage or lien on real property.

Sec. 3. I. A person to whom an obligation secured by a junior mortgage or lien on real property is owed may not bring any action to enforce that obligation after a foreclosure sale of the real property which secured that obligation or a sale in lieu of a foreclosure sale if
(a) The person is a financial institution;
(b) The real property which secured the obligation is a single-family dwelling and the debtor or grantor was the owner of the real property at the time of the foreclosure sale or sale in lieu of a foreclosure sale;
(c) The debtor or grantor used the amount of the obligation to purchase the real property;
(d) The debtor or grantor continuously occupied the real property as the debtor’s or grantor’s principal residence after securing the obligation; and
(e) The debtor or grantor did not refinance the obligation after securing it.
2. As used in this section, “financial institution” has the meaning ascribed to in NRS 363A.050

Sec. 3.3. A civil action not barred by NRS 40.430 or section 3 of this act by a person to whom an obligation secured by a junior mortgage or lien on real property is owed to obtain a money judgment against the debtor after a foreclosure sale of the real property or a sale in lieu of a foreclosure sale may only be commenced within 6 months after the date of the foreclosure sale or sale in lieu of a foreclosure.
Sec. 4. (Deleted by amendment.)

Sec. 5. NRS 40.459 is hereby amended to read as follows:
40.459 I. After the hearing, the court shall award a money judgment against the debtor, guarantor or surety who is personally liable for the debt. The court shall not render judgment for more than:
{4-} (a) The amount by which the amount of the indebtedness which was secured exceeds the fair market value of the property sold at the time of the sale, with interest from the date of the sale; fef
—2.} (b) The amount which is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured, with interest from the date of sale
; or
(c) If the person seeking the judgment acquired the right to obtain the judgment from a person who previously held that right, the amount by which the amount of the consideration paid for that right exceeds the fair market value of the property sold at the time of sale or the amount for which the property was actually sold, whichever is greater, with interest from the date of sale and reasonable costs,
- whichever is the lesser amount.
2. For the purposes of this section, the “amount of the indebtedness” does not include any amount received by, or payable to, the judgment creditor or beneficiary of the deed of trust pursuant to an insurance policy to compensate the judgment creditor or beneficiary for any losses incurred with respect to the property or the default on the debt
Sec. 5.5. NRS 40.495 is hereby amended to read as follows:
40.495 1. The provisions of NRS 40.475 and 40.485 may be waived by the guarantor, surety or other obligor only after default.
2. Except as otherwise provided in subsection {47} 5, a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, may waive the provisions of NRS 40.430. If a guarantor, surety or other obligor waives the provisions of NRS 40.430, an action for the enforcement of that person’s obligation to pay, satisfy or purchase all or part of an indebtedness or obligation secured by a mortgage or lien upon real property may be maintained separately and independently from:
(a) An action on the debt;
(b) The exercise of any power of sale;
(c) Any action to foreclose or otherwise enforce a mortgage or lien and the indebtedness or obligations secured thereby; and
(d) (d) Any other proceeding against a mortgagor or grantor of a deed of trust.
3. If the obligee maintains an action to foreclose or otherwise enforce a mortgage or lien and the indebtedness or obligations secured thereby, the guarantor, surety or other obligor may assert any legal or equitable defenses provided pursuant to the provisions of NRS 40.451 to 40.463, inclusive.
4. If before a foreclosure sale of real property, the obligee commences an action against a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, to enforce an obligation to pay, satisfy or purchase all or part of an indebtedness or obligation secured by a mortgage or lien upon the real property:
(a) The court must hold a hearing and take evidence presented by either party concerning the fair market value of the property as of the date of the commencement of the action. Notice of such hearing must be served upon all defendants who have appeared in the action and against whom a judgment is sought, or upon their attorneys of record, at least 15 days before the date set for the hearing.
(b) After the hearing, if the court awards a money judgment against the debtor, guarantor or surety who is personally liable for the debt, the court must not render judgment for more than:
(1) The amount by which the amount of the indebtedness exceeds the fair market value of the property as of the date of the commencement of the action; or
(2) If a foreclosure sale is concluded before a judgment is entered, the amount that is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured,
6* whichever is the lesser amount.
5. The provisions of NRS 40.430 may not be waived by a guarantor, surety or other obligor if the mortgage or lien:
(a) Secures an indebtedness for which the principal balance of the obligation was never greater than $500,000;
(b) Secures an indebtedness to a seller of real property for which the obligation was originally extended to the seller for any portion of the purchase price;
(c) Is secured by real property which is used primarily for the production of farm products as of the date the mortgage or lien upon the real property is created; or
(d) Is secured by real property upon which:
(1) The owner maintains the owner’s principal residence;
(2) There is not more than one residential structure; and
(3) Not more than four families reside.
6. As used in this section, “foreclosure sale” has the meaning
ascribed to it in NRS 40.462.
Sec. 5.7. NRS 11.190 is hereby amended to read as follows:
11.190 Except as otherwise provided in NRS 125B.050 and 217.007, and section 3.3 of this act, actions other than those for the recovery of real property, unless further limited by specific statute, may only be commenced as follows:
1. Within 6 years:
(a) An action upon a judgment or decree of any court of the United States, or of any state or territory within the United States, or the renewal thereof.
(b) An action upon a contract, obligation or liability founded upon an instrument in writing, except those mentioned in the preceding sections of this chapter.
2. Within 4 years:
(a) An action on an open account for goods, wares and merchandise sold and delivered.
(b) An action for any article charged on an account in a store.
(c) An action upon a contract, obligation or liability not founded upon an instrument in writing.
(d) An action against a person alleged to have committed a deceptive trade practice in violation of NRS 598.0903 to 598.0999, inclusive, but the cause of action shall be deemed to accrue when the aggrieved party discovers, or by the exercise of due diligence should have discovered, the facts constituting the deceptive trade practice.
3. Within 3 years:
(a) An action upon a liability created by statute, other than a penalty or forfeiture.
(b) An action for waste or trespass of real property, but when the waste or trespass is committed by means of underground works upon any mining claim, the cause of action shall be deemed to accrue upon the discovery by the aggrieved party of the facts constituting the waste or trespass.
(c) An action for taking, detaining or injuring personal property, including actions for specific recovery thereof, but in all cases where the subject of the action is a domestic animal usually included in the term “livestock,” which has a recorded mark or brand upon it at the time of its loss, and which strays or is stolen from the true owner without the owner’s fault, the statute does not begin to run against an action for the recovery of the animal until the owner has actual knowledge of such facts as would put a reasonable person upon inquiry as to the possession thereof by the defendant.
(d) Except as otherwise provided in NRS 112.230 and 166.170, an action for relief on the ground of fraud or mistake, but the cause of action in such a case shall be deemed to accrue upon the discovery by the aggrieved party of the facts constituting the fraud or mistake.
(e) An action pursuant to NRS 40.750 for damages sustained by a financial institution or other lender because of its reliance on certain fraudulent conduct of a borrower, but the cause of action in such a case shall be deemed to accrue upon the discovery by the financial institution or other lender of the facts constituting the concealment or false statement.
4. Within 2 years:
(a) An action against a sheriff, coroner or constable upon liability incurred by acting in his or her official capacity and in virtue of his or her office, or by the omission of an official duty, including the nonpayment of money collected upon an execution.
(b) An action upon a statute for a penalty or forfeiture, where the action is given to a person or the State, or both, except when the statute imposing it prescribes a different limitation.
(c) An action for libel, slander, assault, battery, false imprisonment or seduction.
(d) An action against a sheriff or other officer for the escape of a prisoner arrested or imprisoned on civil process.
(e) Except as otherwise provided in NRS 11.215, an action to recover damages for injuries to a person or for the death of a person caused by the wrongful act or neglect of another. The provisions of this paragraph relating to an action to recover damages for injuries to a person apply only to causes of action which accrue after March 20, 1951.
(f) An action to recover damages under NRS 41.740.
5. Within 1 year:
(a) An action against an officer, or officer de facto to recover goods, wares, merchandise or other property seized by the officer in his or her official capacity, as tax collector, or to recover the price or value of goods, wares, merchandise or other personal property so seized, or for damages for the seizure, detention or sale of, or injury to, goods, wares, merchandise or other personal property seized, or for damages done to any person or property in making the seizure.
(b) An action against an officer, or officer de facto for money paid to the officer under protest, or seized by the officer in his or her official capacity, as a collector of taxes, and which, it is claimed, ought to be refunded.
(c) Sec. 5.8. Section 6 of Assembly Bill No. 284 of this session is hereby amended to read as follows:
Sec. 6. Chapter 107 of NRS is hereby amended by adding thereto a new section to read as follows:
1. The trustee under a deed of trust must be:
(a) An attorney licensed to practice law in this State;
(b) A title insurer or title agent authorized to do business in this State pursuant to chapter 692A of NRS;
(c) A person licensed pursuant to chapter 669 of NRS;
(d) A domestic or foreign entity which holds a current state business license issued by the Secretary of State pursuant to chapter 76 of NRS;
(e) A person who does business under the laws of this State, the United States or another state relating to banks, savings banks, savings and loan associations or thrift companies;
(f) A person who is appointed as a fiduciary pursuant to NRS 662.245;
(g) A person who acts as a registered agent for a domestic or foreign corporation, limited-liability company, limited partnership or limited-liability partnership;
(h) A person who acts as a trustee of’ a trust holding real property for the primary purpose of facilitating any transaction with respect to real estate if he or she is not regularly engaged in the business of acting as a trustee for such trusts;
(i) A person who engages in the business of a collection agency pursuant to chapter 649 of NRS; or
Q) A person who engages in the business of an escrow agency, escrow agent or escrow officer pursuant to the provisions of chapter 645A or 692A of NRS.
2. A trustee under a deed of trust must not be the beneficiary of the deed of trust for the purposes of exercising the power of sale pursuant to NRS 107.080.
3. A trustee under a deed of trust must not:
(a) Lend its name or its corporate capacity to any person who is not qualified to be the trustee under a deed of trust pursuant to subsection 1.
(b) Act individually or in concert with any other person to circumvent the requirements of subsection 1.
4. A beneficiary of record may replace its trustee with another trustee. The appointment of a new trustee is not effective until the substitution of trustee is recorded in the office of the recorder of the county in which the real property is located.
5. The trustee does not have a fiduciary obligation to the grantor or any other person having an interest in the property which is subject to the deed of trust. The trustee shall act impartially and in good faith with respect to the deed of trust and shall act in accordance with the laws of this State. A rebuttable presumption that a trustee has acted impartially and in good faith exists if the trustee acts in compliance with the provisions of NRS 107.080. In performing acts required by NRS 107.080, the trustee incurs no liability for any good faith error resulting from reliance on information provided by the beneficiary regarding the nature and the amount of the default under the obligation secured by the deed of trust if the trustee corrects the good faith error not later than 20 days after discovering the error.
6. If in an action brought by a grantor, a person who holds title of record or a beneficiary in the district court in and for the county in which the real property is located, the court finds that the trustee did not comply with this section, any other provision of this chapter or any applicable provision of chapter 106 or 205 of NRS, the court must award to the grantor, the person who holds title of record or the beneficiary:
(a) Damages of $5,000 or treble the amount of actual damages, whichever is greater;
(b) An injunction enjoining the exercise of the power of sale until the beneficiary, the successor in interest of the beneficiary or the trustee complies with the requirements of subsections 2, 3 and 4; and
(c) Reasonable attorney’s fees and costs,
4.0 unless the court finds good cause for a different award. Sec. 5.9. Section 14.5 of Assembly Bill No. 284 of this session is hereby amended to read as follows:
Sec. 14.5. The amendatory provisions of:
1. Section 1 of this act apply only to an assignment of a mortgage of real property, or of a mortgage of personal property or crops recorded before March 27, 1935, and any assignment of the beneficial interest under a deed of trust, which is made on or after fklyl October 1, 2011.
2. Section 2 of this act apply only to an instrument by which any mortgage or deed of trust of, lien upon or interest in real property is subordinated or waived as to priority which is made on or after October 1, 2011.
3. Section 5 of this act apply only to an instrument encumbering a borrower’s real property to secure future advances from a lender within a mutually agreed maximum amount of principal, or an amendment to such an instrument, which is made on or afters October 1, 2011.
4. Section 9 of this act apply only to a notice of default and election to sell which is recorded pursuant to NRS 107.080, as amended by section 9 of this act, on or after October 1, 2011.
Sec. 5.95. Section 15 of Assembly Bill No. 284 of this session is hereby amended to read as follows:
Sec. 15. This act becomes effective on – October 1, 2011.
Sec. 6. The amendatory provisions of:
1. Sections 1 to 3, inclusive, of this act apply only to an obligation secured by a mortgage, deed of trust or other encumbrance upon real property on or after the effective date of this act.
2. Sections 3.3 and 5.7 of this act apply only to an action commenced after a foreclosure sale or sale in lieu of a foreclosure sale that occurs on or after July 1, 2011.
3. Section 5.5 of this act apply only to an action against a guarantor, surety or other obligor commenced on or after the effective date of this act.
Sec. 7. 1. This section and sections 1 to 3, inclusive, 5, 5.5 and 5.8 to 6, inclusive, of this act become effective upon passage and approval.
2. Sections 3.3 and 5.7 of this act become effective on July 1, 2011.

Unending Litigation Against Wells Fargo

As we stated that certain lenders are the laziest, most procastinator when it comes to loan modification. No matter what happens, they would never change themselves. Case in point is Bank of America. This bank has been sued left and right throughout USA, but still not changing and learning its lesson. Now, the latest news is that it would lay off some 40,000 people. Again, this top list includes Wells Fargo, Bank of America, and of course Chase bank. They would always find something to deny or delay your request for loan modification. Anyway, recently two lawsuits have been filed against Wells Fargo for discriminatory lending practices. One lawsuit is filed by the city of Memphis and Shelpy County, Tenn. Redlining is a term of the real estate when you steer certain minorities for improper lending based on the color of their skin and other social factors. Here, this lender has targeted individual property owners with specific lending practices increasing foreclosure and vacancies with specific results. The judge in this case had found a plausible link of deliberately steering African-American borrowers who qualified for prime mortgages into sub mortgages.

US is Suing Big Banks Over Mortgages

The NY times has recently reported that the federal agency that oversees the mortgage giants “Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation”. These lenders include Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others.

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value. Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

We are thrilled about this news. This proves that the predatory lender had wide implications then what everyone initially thought. The foreclosure crisis looming on US is unending, and the economy cannot be improved, until this gigantic crisis is controlled and remedied. This crisis has especially hit hard Nevada, and its economy. We virtually see no construction activities at this time. The latest job report is very dismal. The politicians are running from pillar to post, and nothing tangible is done to rectify the job situation. Only statements are delivered for their print effect.

What is MERS and Had They Lost Their Significance?

What To Do With Mers?
Most of the mortgages are owned by an entity called MERS (Mortgage Electronic Recording System). This is not some physical entity, it is just like an electronic warehouse which keeps title record of most of the mortgages in USA. Now, irrespective of the fact that you are making your mortgage payments directly to your lender, this entity possibly may have all of your records. It is an electronic entity. Many cases have been decided in USA calling it a non party-in-interest. This term is a legal terms which means that only legal entity can sue or be sued. Every action in US courts must be initiated by a real party in interest and be defended by a real party in interest. MERS as such is not a real party in interest. They can be identified in your mortgage record as the “mortgagee of record” or sometimes as “nominee” or agent for the purpose of making future transfer of transactions.

What Is MERS and How Does It Work?
It was a mysterious electronic organization, a very large electronic database of mortgages and mortgage transactions. It was crafted in the mid 1990s as a legal device to replace the county land title recording system. The real estate boom was largely attributed to MERS as the securitization process culminates with MERS. Most of the lenders joined MERS happily as it transferred and registered all the mortgage transaction to its data bank. The lenders saved lots of money because most of the transaction took place electronically and saved millions for lenders as they saved having local agents in various counties throughout USA. Also, most of its work was generic, similar, and ingenuity was required so there was a tremendous cost saving which made lenders very rich, and softened their lending practices.

Innumerable Problems Created by the MERS System
We know that under the traditional (and legally authorized) method of keeping track of who owns what, any person is free to walk into a land records office and search the entire historical record of who bought and sold any particular piece of property. In other words, this was commonly called a “title search.” Under the MERS system, however, no such search is possible. MERS Members are not required to report transfers to the database and so there is no real way to be sure about who owns what.

One Court Says: MERS Doesn’t Deliver Clear Title
Back to our previous comment that MERS cannot sue in their names because they are not a real party in interest. As it is one of the cardinal principle of transfer that a note follows the deed and they cannot be sold separately. In In re Agard, a bankruptcy judge analyzed MERS for the purpose of deciding whether a bank seeking foreclosure could prove that it owned the promissory note accompanying the mortgage — a prerequisite in bankruptcy court when asking the court for permission to proceed with the foreclosure. Previously, MERS had attempted to assign the mortgage and promissory note to the foreclosing bank and the question was whether it successfully did so.

The bankruptcy court in Nevada had decided that MERS is not a proper party which can sue in its own name because it had not entered into any transactions with the homeowners. It concluded that MERS, as currently structured, did not deliver clear title to the foreclosing bank.
MERS Announces Some Changes
Because of the various problems it faces in the Courts, MERS has recently announced that it is changing one of its membership rules (Rule 8) to require that members no longer foreclose in MERS name. MERS has also told its members that assignments out of MERS’s name should be recorded in the county land records even if the state law doesn’t require it.

Foreclosure Lawyers Not Above Board–Judge Berate Bank Lawyers

While we criticize everyone including lenders, mortgage brokers, bank attorneys has been berated by judges lately. Now judges are lamenting and doing their scorching criticism of lawyers–notably bank lawyers. Judges have accused lawyers of processing shoddy or fabricated paperwork when representing their clients i.e banks. Here, is one such judge. Judge Arthur M. Schack of New York State Supreme Court in Brooklyn has taken aim at an upstate lawyer, Steven J. Baum, referring to one filing as “incredible, outrageous, ludicrous and disingenuous.” As we know, New York judges are also trying to take the lead in fixing the mortgage mess by leaning on the lawyers. In November, a judge ordered Mr. Baum’s firm to pay nearly $20,000 in fines and costs related to papers that he said contained numerous “falsities.” The judge, Scott Fairgrieve of Nassau County District Court, wrote that “swearing to false statements reflects poorly on the profession as a whole.”

The courts in New York State, along with Florida, have begun requiring that lawyers in foreclosure cases vouch for the accuracy of the documents they present. This also prompted a protest from the New York bar. We know that involvement of lawyers in questionable transaction can expose them to disciplinary conduct under their respective bar associations. It may reflect very poorly on our profession as a whole. The role of lawyers is under scrutiny in 23 states where foreclosures must be reviewed by a court. The situation has become especially heated for high-volume firms whose practices mirror the so-called robo-signing of some financial institutions. Robo signing, as you may know, was an accelerated process to do foreclosure without actually physically signing by someone knowledgeable and was merely a rubber stamp hoodwinked the foreclosure process.

Massachusetts Settles Suits Against Mortgage Lender Option One

We are hearing good news of homeowners fight against their predatory lenders. One such good news came from Massachusetts. Associated Press had reported (published in NY Times also in their August 11, 2011 issue) that Option One now known as Sand Canyon, agreed to make loan modification valued at $115 milliont to homeowners facing foreclosure. This lender has issued from 2004 through 2007 risky loans that did not document borrowers’ incomes to confirm they could afford the loans. Our readers may like to know that this lender is a subsidiary of H&R Block. They did not care of the general eligibility of homeowners and just based everything on their own model of not doing any loan modifications. Nearly 5,500 homeowners could get some relief on their loan payments under the settlement.

Refinancing Plan for Mortgages

Finally, something good came in the news and that is the refinancing of underwater homes. Despite the fact that there has been a very low interest rate available but many homeowners could not take benefit due to the fact of bad appraisals and their bad credit owing to delinquencies on their homes. However, good news is that Obama Administration is actively thinking of helping homeowners in refinancing their deep under water homes. Also, this would impact economy in creating more jobs, stopping foreclosure and the surplus money thus saved put back into our economy. It is an excellent proposal and we completely support it. Here is the full article:

U.S. May Back Refinance Plan for Mortgages
By SHAILA DEWAN and LOUISE STORY
The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

Administration officials said on Wednesday that they were weighing a range of proposals, including changes to its previous refinancing programs to increase the number of homeowners taking part. They are also working on a home rental program that would try to shore up housing prices by preventing hundreds of thousands of foreclosed homes from flooding the market. That program is further along — the administration requested ideas for execution from the private sector earlier this month.

But refinancing could have far greater breadth, saving homeowners, by one estimate, $85 billion a year. Despite record low interest rates, many homeowners have been unable to refinance their loans either because they owe more than their houses are now worth or because their credit is tarnished.

Exactly how a refinancing plan might work is still under discussion. It is unclear, for example, whether people who are delinquent on their mortgages would be eligible or whether lenders would administer it. Federal officials have consistently overestimated the number of households that would be helped by their various housing assistance programs.

A working group of housing experts across several federal agencies could recommend one or both proposals, or come up with new ones. Or it might decide to do nothing.

Investors may suspect a plan is in the works. Fannie and Freddie mortgage bonds had been trading well above their face value because so few people were refinancing, keeping returns on the bonds high. But those bond prices dropped sharply this week.

Administration discussions about housing proposals have taken on added urgency this summer because the housing market is continuing to deteriorate. On Wednesday, the government said that prices of homes with government-backed mortgages fell 5.9 percent in the second quarter from a year earlier, the biggest decline since 2009. More than one in five homeowners with mortgages owe more than their homes are worth. Some analysts are now predicting waves of foreclosures and a continuing slide in home prices.

There is not much time to help the market before the 2012 election, and given Congressional resistance to other types of stimulus, housing may be the only economic fix in reach. Federal programs to assist homeowners have been regarded as ineffective so far, and they are complex.

“We are looking at trying to encourage more participation in all of the programs, including those that help with refinancing,” said Phyllis Caldwell, who oversees housing policy at the Treasury Department.

Some economists say that with housing prices and interest rates at affordable levels, only fear is keeping consumers out of the market. Frank E. Nothaft, the chief economist at Freddie Mac, said the federal action could instill confidence.

“It almost seems to me you want to have some type of announcement or policy, program or something from the federal government that provides that clear signal that we are here supporting the housing market and this is indeed a good time to really consider buying,” Mr. Nothaft said.

The refinancing idea has been around since at least 2008, but proponents say the recent drop in interest rates to below 4 percent may breathe new life into the plan.

“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” said Christopher J. Mayer, an economist at the Columbia Business School. “So I think this is low-hanging fruit.” Mr. Mayer and a colleague, Glenn Hubbard, who was chairman of the Council of Economic Advisers under President George W. Bush, proposed an early version of the plan.

The idea is appealing because it would not necessarily require Congressional action. It also would not tap any of the $45.6 billion in Troubled Asset Relief Funds that was set aside to help struggling homeowners. Only $22.9 billion of that pool has been spent or pledged so far, and fewer than 1.7 million loans have been modified under federal programs. But Andrea Risotto, a Treasury spokeswoman, said whatever was left would be used to reduce the federal deficit.

A mass refinancing plan would spread the benefits of the Federal Reserve’s most important economic policy response, low interest rates, to more people. As of July, an estimated $2.4 trillion in mortgages backed by Fannie and Freddie carried interest rates of 4.5 percent or higher.

The two prevailing ideas, lowering rates on mortgages and converting houses owned by government entities like Freddie and Fannie into rentals and other uses, have somewhat different pockets of support. Investment firms would like to participate in the rental program, especially if the government lends them money to participate. For the most part, banks prefer the refinancing plan. There are many high-ranking proponents of the refinancing plan. Joseph Tracy, a senior adviser to the chairman of the New York Federal Reserve, has circulated a presentation in support of the plan. And Richard B. Berner, who recently joined the Treasury Department as counselor to Secretary Timothy F. Geithner, argued in favor of a blanket refinancing in his previous job as chief United States economist for Morgan Stanley. The proponents say the plan carries little risk because the mortgages are already guaranteed by Fannie Mae and Freddie Mac. They also say it makes those loans less likely to go into default and ultimately foreclosure.

But the plan has some drawbacks. Some officials fear that promoting mass refinancings today could spook investors and make borrowing more expensive, for both homeowners and the federal government, in the future.

The government has already encouraged some refinancing through the Federal Housing Administration and through Fannie and Freddie, but participation is limited. For example, the Home Affordable Refinance Program excludes homeowners who owe more than 125 percent of the value of their house. To spur more refinancing, the government may decide to encourage Fannie and Freddie to lift such restrictions.

But government officials cautioned that Fannie and Freddie do not do the administration’s bidding, even though they are essentially owned by taxpayers. Edward J. DeMarco, who oversees the companies as acting director of the Federal Housing Finance Agency, has voiced concerns about any plan that might cost the companies money, according to the two people briefed on the discussions. “F.H.F.A. remains open to all ideas that provide needed assistance to borrowers” while minimizing the cost to taxpayers, Mr. DeMarco said in a written statement.

A broader criticism of a refinancing expansion is that it would not do enough to address the two main drivers of foreclosures: homes worth less than their mortgages, and a sudden loss of income, like unemployment. American homeowners currently owe some $700 billion more than their homes are worth.

This article has been revised to reflect the following correction:

Correction: August 26, 2011

An article on Thursday about the Obama administration’s consideration of a proposal to allow homeowners with government-backed mortgages to refinance them at today’s lower interest rates misstated Edward DeMarco’s title at the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. He is its acting director, not its chairman.

Homeowners Needs Help–The Economy is Not Reviving

href=”http://www.nytimes.com/2011/08/22/opinion/homeowners-need-help.html?_r=1&hp”>

Mountain of paperworks for loan modification

The following post is an interesting link where a homeowner was swamped endlessly with paperwork after paperwork by bank. This shows how callous a system has become, rubbing the miseries of homeowners.

http://redtape.msnbc.msn.com/_news/2011/06/27/6957811-why-is-housing-market-stuck-this-family-offers-one-answer