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Posted at 2:51 PM ET, 01/28/2011

Bank of America fights judge's order halting 8,900 Nevada foreclosures

By Ariana Eunjung Cha


(Photo Credit: AP Photo/Julie Jacobson)

Bank of America is aggressively moving to appeal a Nevada county judge's order halting more than 8,900 foreclosures.

In one of a growing number of foreclosure cases across the country in which judges are questioning whether notices and documents were improperly prepared, Nye County District Court Judge Robert Lane issued a preliminary injunction against BofA's ReconTrust subsidiary, blocking it from proceeding with non-judicial foreclosures statewide until a Feb. 28 hearing.

The case involves a borrower, Suzanne A. North, who sued the bank on Jan. 11 arguing that ReconTrust filed foreclosure papers when it did not have the legal standing to do so.

In a court filing Wednesday obtained by the Las Vegas Sun, Bank of America says that Bank of America and ReconTrust are in compliance with Nevada foreclosure laws and that the borrower's case will ultimately fail.

The bank also argues that the harm the injunction "caused to the public interest is overwhelming," and quotes U.S. Treasury Secretary Timothy Geithner to support its case.

"Treasury Secretary Tim Geithner opined that ceasing the foreclosure process is `very damaging' and harms the public as communities are forced to live longer with empty homes, there is increased downward pressure on home prices and increasing blight," the bank said. "The order also harms those subject to the foreclosure process because those individuals, especially those in mediation trying to stay in their homes, are now forced into a state of limbo for an unspecified duration."

North's attorney has said he will seek class-action status for the suit--a prospect that has the mortgage finance companies worried.

The Nevada case is the second big blow to the industry this year. Earlier this month, the Massachusetts Supreme Court voided two foreclosures because the banks failed to show the proper paperwork to prove they owned the loans. That decision challenges the way mortgages were bundled and sold around the world and could lead to the invalidation of thousands of foreclosures across the state.

By Ariana Eunjung Cha  | January 28, 2011; 2:51 PM ET
Categories:  Corporations, Housing  
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Next: Economic agenda: Monday, Jan. 31, 2011


This is why I have stopped using my Bank of America credit card, though I know they won't cry about losing my money.

Posted by: Anonymous | January 28, 2011 4:58 PM | Report abuse

Why can't the courts see the same crimes that the NV AG has listed in her lawsuit against B.of A. ? Why is the National Disgrace called HAMP allowed to continue ?
Where is the press when confronting the banks that have led the country into recession ?

Posted by: Anonymous | January 28, 2011 5:48 PM | Report abuse

Before you refinance, check your credit report for anything that could foul up a refinance. You don't want to lay out the money if a credit problem is going to keep you from refinancing, search online for "123 Mortgage Refi" I just used them and they are the best, they got me 3.113% rate

Posted by: Anonymous | January 29, 2011 12:47 AM | Report abuse

I am amazed that if you live in an Apartment and are late on your rent 2 weeks you get a ton of late fees and a notice to move out, but people live in a Mortgage(LOAN) house for a year "Free" and wonder how the bank can foreclose? The bank still owns the house... Take responsiblity people, the banks don't owe you a hand out.

Posted by: Anonymous | January 29, 2011 9:30 AM | Report abuse

"I am amazed that if you live in an Apartment and are late on your rent 2 weeks you get a ton of late fees and a notice to move out, but people live in a Mortgage(LOAN) house for a year "Free" and wonder how the bank can foreclose"

Landlords have lower profiles at the moment and are less subject to legal or political interference. They can do pretty much what they want as long as their actions follow the letter of the law as most do.

In contrast, the mortgage lenders have tens of thousands of mortgagees which translates into potential political backlash so they are big targets. Any flaws in the process are magnified. It doesn't help that they outsourced servicing their mortgages and foreclosures to third parties. The courts are finding that the foreclosure 'mills' cut too many corners. That's why you are seeing the judges come down hard on the banks and their mortgage servicers. Judges tend to enforce the letter as well as the spirit of the law.

This is still the tip of the iceberg. I live in a state where banks foreclose on homes without going through a judge - non-judicial foreclosures. Our local yokel politicians are usually 3-5 years behind the curve so it will take a few years until they will catch on and start requiring the mortgage lenders to follow the letter of the law here (also applies to many other slow mover states) as the courts are doing now in the harder hit states like CA, NV, and FL.

Posted by: Anonymous | January 29, 2011 6:26 PM | Report abuse

Mortgage Rates have hit an all time low! For many, these rates will be the lowest we see in our lifetime. Rates change several times throughout the day, so to get an accurate quote search online for "123 Mortgage Refinance"

Posted by: Anonymous | January 30, 2011 2:04 AM | Report abuse

Where are all the criminal indictments against these banks for the fraudulent documents they used? They have illegally foreclosed homes against US citizens and committed a crime. Time to see charges being brought or is Holder too busy suing AZ to get anything else done?

Posted by: Desertdiva1 | January 31, 2011 5:22 PM | Report abuse

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