Vincent Howard and our Rubidoux foreclosure defense attorneys were interested to see a foreclosure case stemming out of a mediation in neighboring Nevada. Like Southern California's Inland Empire, the Las Vegas area was particularly hard hit by foreclosures, and the state of Nevada responded by setting up a foreclosure mediation program intended to help homeowners hold on to their homes when financially possible. Unfortunately, as with the foreclosure process itself, many lenders participated in these mediations with no intention of coming to a workable agreement. In Einhorn v. BAC Home Loans Servicing, Arthur Einhorn alleged that BAC Home Loans participated in his foreclosure mediation in bad faith, because it failed to produce the necessary documents at mediation. The trial court found no bad faith, and on appeal, the Nevada Supreme Court affirmed.
A Nevada homeowner headed to foreclosure may request mediation, which is what Einhorn did. The law requires foreclosing companies to attend, to mediate in good faith, to bring required documents, and to ensure that their representatives have the authority to modify loans. Einhorn's complaint alleged that BAC failed to bring each assignment of the deed or trust--as required by statute, in order to ensure that it had the right to foreclose. Thus, he argued, BAC negotiated in bad faith. The mediator found that BAC failed to bring all required documents, citing a gap in the assignments a lost note certification that appeared to contradict the trustee's claim that it possessed the original note. Nonetheless, the mediator did not find bad faith. Relying on a signed affidavit from BAC, the trial court concluded that there was no irregularity in the documents and dismissed Einhorn's claim.
The Nevada Supreme Court affirmed, but on slightly different grounds. It expressed regret that the district court found no irregularity in the documents, since BAC's own documents omitted part of the chain of assignments. However, the high court said, Einhorn himself filled in the gap with a document obtained from the county recorder. That document showed an assignment from MERS to Deutsche Bank, thus filling in the chain from the original lender, Countrywide, to MERS, to Deutsche Bank, to BAC. The high court further found that the seeming contradiction between the certification of lost note and BAC's claim to possess the original note is not important, since it may just mean that the note has been found. Einhorn argued that his own production should not be permitted to fill the gap BAC should have been required to fill, but the high court found that BAC had substantially complied even if it didn't follow the letter of the law. Its failure did not prejudice Einhorn's case, the court said, and thus, it affirmed the trial court's ruling.
Vincent Howard and our Tustin foreclosure defense lawyers appreciate that to the high court, who brings the documents may not matter much as long as the documents are there. But because we work with people like Einhorn every day, we know that it matters a lot to them whether the lender is able to prove its own case for foreclosure. Because Einhorn had to track down the missing assignment in the chain, he was effectively proving BAC's own foreclosure case. That means BAC was unable to prove it had the right to foreclosure when it attempted to foreclose--and that's something that should give any mediator or judge a reason to think twice. At Howard Law, P.C., our Redlands foreclosure defense attorneys have seen many cases with this kind of sloppy paperwork problem, and we believe the borrowers are the ones who are punished, even when the problem is created by the lender.
If you believe you're being foreclosed on wrongly, you may be able to stop it with quick legal action. To learn more or tell your story to Vincent Howard and the Howard Law team, call us today at 1-800-872-5925 or send us an email.