With the issue of alleged use of faulty documents in bank foreclosures still a hot topic in Nevada; other distressed property types seem to have gone out of the radar. Tax lien foreclosures and other non-bank foreclosure types have been forgotten in the heat of accusations against major lenders who allegedly processed paperwork without reading them first.
Because Las Vegas repo homes and bank foreclosures in the rest of the area recorded the highest totals among all 50 U.S. states, the issue of faulty foreclosure documents is expected to have a bigger impact on the region. Right after Nevada Attorney General Catherine Cortez Masto's decision to join other AGs in the U.S. in the nationwide investigation of these allegations, lenders and homeowners' lawyers started the verbal debate.
According to a number of lawyers who represent troubled borrowers, some bank representatives arrive at mediation hearings carrying the wrong documents. As expected, banking industry executives have denied these claims and have asserted that if there were any faulty paperwork in any processing of repo homes in Nevada, this will be negligible and practically nil.
However, some supporters of the nationwide probe have claimed that in the state of Nevada where bank foreclosures, government distressed properties and tax lien foreclosures dominate the housing industry, it is highly possibly that faulty documents have been used in a significant number of foreclosure cases. They further added that these problems might even be more prevalent in mediation cases.
Lawyers who represent owners of foreclosures and repo home for sale have alleged that the process of mediation in Nevada has a lot of flaws. The most troubling, some lawyers have claimed, is that banks are allowed to certify that the mortgage documents are theirs without needing to produce the original copies. Although certifications require notarization, lawyers for homeowners have stated that there is nothing to stop lenders from using their own workers to notarize the paperwork.
As the debate between homeowners' attorneys and lenders continues, the number of tax lien foreclosures and bank distressed properties shows no sign of abating in Nevada. Housing analysts are predicting that it will take years before the state gets out of the crisis created by foreclosures.
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