Foreclosure News


(AP) LAS VEGAS — A pair of Nevada Supreme Court rulings requiring mortgage lenders to produce all required foreclosure documents before repossessing a house won’t establish a new legal standard because they rely on state high court opinions issued last July, a court official and a lawyer involved in the case said Tuesday.

In unanimous rulings Friday in the state hardest hit by foreclosures during the Great Recession, the high court ruled there was insufficient documentation for separate foreclosure cases involving Carl Piazza and lender CitiMortgage Inc. in Las Vegas, and Caroline Karl and lenders including HSBC Bank USA in Reno.

The court sent Piazza’s case back to Clark County District Judge Donald Mosley, who had determined that lenders produced enough documentation to foreclose, and Karl’s case back to Washoe County District Judge Patrick Flanagan.

“It does not appear that the District Court reviewed the assignments presented by CitiMortgage to ensure they were in strict compliance,” the court said in the Piazza order.

“The record lacks clarity as to whether HSBC provided all the proper documentation,” the seven justices said in the Karl order.

However, the court noted that Friday’s orders weren’t to be regarded as precedent and cannot be cited as legal authority.

Supreme Court spokesman Bill Gang in Las Vegas said the administrative orders were just two of a “significant” number of similar foreclosure mediation appeals pending before the state’s only appellate court.

Attorney Jacob Hafter, who represents Piazza and has several similar cases involving other clients awaiting Supreme Court orders, said the justices didn’t apply new law.

“The July cases set the rule,” Hafter said. “Now they’re just applying the rule.”

The July cases — Leyva v. National Default Servicing Corp. and Pasillas v. USBC Bank USA — call for a strict standard of proof of ownership for lenders, including a requirement they produce the original note and deed of trust plus subsequent ownership records before seizing homes.

A Nevada state law that took effect Oct. 1 also requires the filing of foreclosure documents in the county where a property is located and proof of ownership with a notarized affidavit detailing a lender’s legal right to proceed.

Nevada’s foreclosure mediation program was created in 2009 to give lenders, homeowners and an independent third-party arbitrator a chance to rework defaulted loans and avoid foreclosures.