(Note: Notices of default are the first step in the foreclosure process and can be filed after a borrower is three months late on a mortgage payment.)
Watch video explaining the AB 284 from “default” and the possible consequences of this bill (I don’t agree with his conclusion but he explains the issue well)
Just read an article at RGJ that NOD (notice of default) dropped significantly due to a new Nevada law. This is the law that the article is talking about:
“This law mandates stricter recording requirements for foreclosure filings, including the recording of assignments with the county; disclosure of the full name and addresses of the mortgage note holder, deed of trust beneficiaries, servicers and trustees; and prohibition of using subsidiaries as trustees.”
In a nutshell, the law includes measures to prevent robo-signings and requires foreclosure-related filings to include the names and addresses of the mortgage note holder, deed of trust beneficiaries, servicers and trustees.
After the law was passed, default filings fell significantly — before AB284 came into effect early last month, NODs surged from 427 in July to 642 in August and 612 in September as filers tried to beat the deadline. No surprise there as banks tried to file as much cases before the law was put into effect.
The steep decline in NOD filings in October likely indicates the difficulties banks are having in complying with the new recording requirements, Giles said, a Reno lawyer that specializes in mortgage defaults.
“It has become really tough to do a foreclosure since the law changed,” Giles said. “Now they have to put together all these materials that they didn’t have to before and I think they’re having trouble doing it. There may even be cases where they don’t have the information or materials they need at all.”
Banks are making sure that they cross their “t’s” and dot their “i’s” because the new law makes misrepresentations in foreclosure filing information a felony, said Reno lawyer Greg Jensen. Gone are the days when they can attend foreclosure mediations and lie about being the owner of the mortgage note without serious consequences.
The widespread fear is that this law will lead to increased “shadow inventory” where distressed properties are in “hiding” and not yet released in the market — like a overflowing dam, many fear that this will only prolong the Reno real estate market recession; worst, flood the market with a huge inventory . That could happen, but what’s important right now is financial institutions being held accountable as more and more NODs were being sold pennies to the dollar, that leads to borrowers being harassed.