Monday, November 28, 2011

Bank official says lessons learned from robo-signing

It's not the new Nevada law that has scared banks from filing notices of default.
It's lessons learned from the robo-signing scandal that emerged late last year, a Bank of America spokeswoman said Tuesday.
"We want to do everything properly," Jumana Bauwens said from Bank of America's corporate office in Los Angeles. "Before proceeding with foreclosure activities, Bank of America is ensuring that our processes are designed to be carried out in accordance with the new legislation in Nevada."
The main component of Assembly Bill 284, the law that took effect in October, requires that lenders filing a notice of default submit an affidavit stating they have the authority to foreclose on the property, basically that they own the actual note and deed of trust.
That has become a major obstacle for some lenders, particularly those in "judicial foreclosure states" such as Florida, New York and New Jersey that require court approval to foreclose. Foreclosures in New York take an average 986 days, compared with 379 in Clark County.
The new law has already throttled foreclosure proceedings in Nevada. Lenders filed 897 notices of default in Clark County in October, compared with an average of 4,453 a month from January through September, Discovery Bay, Calif.-based foreclosure information company reported. The number fell to 259 through the first half of November.
AB 284 has affected all banks, Nevada Bankers Association President Bill Uffelman said. They are reviewing processes and procedures to make sure they comply with the law's requirements, he said.
"At least one community bank had to turn foreclosures over to outside counsel versus using in-house counsel, increasing their costs," Uffelman said. "Like all things that change, we will work through it."
ForeclosureRadar Chief Executive Officer Sean O'Toole said one section of the law appears to be specifically targeted toward Bank of America and its subsidiary, ReconTrust, which acts as the trustee in foreclosure proceedings.
The law says the beneficiary can't be the trustee, so Bank of America will have to find a new trustee in Nevada, O'Toole said.
Bank of America's Bauwens said ReconTrust served as trustee for most of the mortgages in hardest-hit states such as Nevada, Arizona and Florida. However, the bank uses other trustees and foreclosure activity should start moving forward in the coming months, she said.

The new law protects homeowners from improper foreclosures and protects the integrity of the homeownership system, Nevada Attorney General Catherine Cortez Masto said.
It was crafted largely in response to unscrupulous business practices such as robo-signing that produced false documents used to justify improper foreclosures, she said.
"The significant drop-off in filings of notices of default may be attributed to the fact that robo-signing is occurring and now those servicers cannot legally foreclose or that foreclosure servicers are taking the time to re-evaluate their procedures to ensure compliance with the new law," Masto said in an email.
"Either way, one month of data is too early to draw any strong conclusions," Masto said. "In addition, we understand that complying with any new law requires businesses to make changes in their prior business practices, which may not be accomplished overnight."
Masto said the dramatic decrease in foreclosure filings -- which has thrown local real estate agents into a panic over future inventory -- is not an "indictment" of the new law.
She's confident that legitimate businesses pursuing proper foreclosures will devote the effort necessary to comply with the law. They will incorporate those requirements into their business practices, just as they did when they had to adapt to the new foreclosure mediation program several years ago, Masto said.
Officials from Wells Fargo had no comments on the law.
Wells Fargo is challenging the constitutionality of the Nevada's foreclosure mediation program. The bank has appealed to the Nevada Supreme Court an order from a state District Court that rewrites several terms of a defaulting homeowner's mortgage. Attorneys argue that the program violates not only the state's basic charter, but also the takings, contract and due process clauses of the U.S. Constitution.
Mark Connot, real estate attorney with Fox Rothschild in Las Vegas, said the law is good in that it addresses the robo-signing issue. Beyond that, it remains to be seen whether there will be any significant and long-term impact on foreclosures, he said.
An important question revolves around the interpretation of the statute that requires an affidavit, based on personal knowledge and under penalty of perjury, that "the beneficiary under the deed of trust (bank or lending institution), the successor in interest of the beneficiary or the trustee is in actual or constructive possession of the note secured by the deed of trust."
The key phrase is "actual or constructive possession," Connot said.
Constructive possession is generally defined as the power to control and intent to control a particular item of property. An employee of the bank or lending institution will have to sign an affidavit that the lender is in constructive possession of the note.
"In essence, the person signing the affidavit would be stating that the bank or lending institution has both the power and the intent to control," Connot said. "The power to control is the element that will be litigated.
"Even if the note has been bought and sold several times," he said, "the present holder of the note probably has the power to control possession even if it does not have actual possession."
Contact reporter Hubble Smith at or 702-383-0491.

Thursday, November 17, 2011

Housing Picture Expected to Brighten in 2012

Housing Picture Expected to Brighten in 2012
Better times are ahead for the real estate market in the new year, according to several forecasts and recent surveys.
Fiserv, a financial information services firm, predicts that 95 percent of the 384 metro areas it tracks will see prices rise in 2012. 
Many surveys and economists are forecasting a very modest increase for the housing market in the new year, but after several years of dropping prices and rising foreclosures, even the slightest increase would signal a glimmer of hope for the market. In a survey by MacroMarkets of 100 economists and real estate professionals, respondents reported home values will likely rise slightly at 0.25 percent in the new year.

The real estate market still faces a large backlog of foreclosures that it must work through in many markets. As such, price gains through 2015 will likely just be around 1.1 percent, according to the survey. However, this is a reversal after a forecast of 2.8 percent decline in median home values for this year.
Foreclosures continue to weigh on many markets and are preventing home values from stabilizing, economists say. 
"The water is very deep in the living room, but it's no longer getting deeper and is starting to recede,” says Mark Fleming, CoreLogic's chief economist. 
Low interest rates on mortgages mixed with more affordable housing for families in the median income range are expected help the market in its rebound in 2012, economists say.  
Source: “A Smaller House Will Make a Big Difference,” Money Magazine (Nov. 14, 2011)

Nevada foreclosure starts drop sharply

Wednesday, November 9, 2011

Investors betting on recovery for Vegas housing market.

NEW YORK (CNNMoney) -- Las Vegas has suffered through the housing bust like few others places and still has further to fall. But these days many real estate investors and home buyers are betting that it's poised to stage a comeback.

Sin City's metro area led the nation in mortgage defaults for 22 straight months through August and home prices plunged a whopping 60% from their 2006 peak, according to RealtyTrac. And prices still have further to fall. Financial analytics company, Fiserv, projects home prices in Las Vegas could fall another 16% by next June.

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