Bank of America fights judge's order halting 8,900 Nevada foreclosures
(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.
Ariana Eunjung Cha
| January 28, 2011; 2:51 PM ET
Categories: Corporations, Housing
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