Sunday, July 24, 2011

FYI: NV Sup Ct Holds Non-Borrower Title-Holder Eligible for Mediation, Again Requires Sanctions For Mediation Non-Compliance

The Supreme Court of the State of Nevada recently held that a homeowner,
even if not the borrower or mortgagor but who is on title, is entitled to
participate in the Nevada Foreclosure Mediation Program. The Court also
concluded that the trial court abused its discretion in allowing a
foreclosure to continue despite the lender's alleged failure to comply
with mediation rules concerning the production of documentation at

A copy of the opinion is available at:

The mortgagor received and recorded a quitclaim deed in 2007 in exchange
for taking over monthly mortgage payments on a residence in Las Vegas.
The homeowner did not expressly assume the note, however, and it remained
in the original mortgagor's name.

Nonetheless, the homeowner made the mortgage payments in his own name,
rather than the mortgagor's name, for 25 months. Thereafter, the
homeowner defaulted and, upon receiving a notice of election to sell,
decided to pursue mediation through Nevada's foreclosure mediation
program. Both he and the original mortgagor signed the form electing to

The Court observed that the relevant statutory provision provided that
either the grantor or the title holder on record could elect to mediate.
Accordingly, as the defendant had recorded his ownership of the subject
property, he was the title holder of record eligible to participate in the
mediation program.

Regarding compliance with the foreclosure statute's documentation
requirements, the Court first noted that the mediator's statement
indicated the servicer had failed to bring the statutorily required
documents to the mediation. Thus, according to the Court, the servicer
had not strictly complied with the statutory requirements regarding
mediation, specifically, the rule requiring that parties bring complete
copies of all of the required documents to the mediation.

Concluding that the relevant statute did require strict compliance, the
Court rejected the servicer's argument that substantial compliance
sufficed and further determined that such noncompliance warranted

The Court then remanded the cause back to the lower court for purposes of
determining appropriate sanctions.

Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874

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