BofA Unit Ordered to Halt Foreclosures in Nevada

26 Jan

Thanks to Charles Cox for forwarding this article
By David McLaughlin – Jan 25, 2011 4:19 PM PT
A Bank of America Corp. unit, ReconTrust Co. N.A., was ordered by a Nevada judge to temporarily stop foreclosures in the state that aren’t approved by a court order.
Judge Robert W. Lane in Nye County, Nevada, issued a preliminary ruling that blocks ReconTrust from conducting nonjudicial foreclosures until he holds a hearing Feb. 28 on whether to make the ban permanent, according to a Jan. 20 order provided by the court. The injunction was sought in a Nevada homeowner’s lawsuit against Bank of America and ReconTrust.
Stopping the foreclosures is necessary to prevent the “irreparable injury” that would result from “unlawful” seizure of the plaintiff’s home by ReconTrust Co., the judge wrote. The ruling applies to any real estate or personal property in Nevada.
In nonjudicial foreclosures, lenders can seize property without a court order. Some states require a court order, other don’t, and in some, including Nevada, both are used, according to RealtyTrac, which collects foreclosure data. Nevada foreclosures are primarily executed out of court, according to RealtyTrac’s website.
‘Ecstatic’
Suzanne North, the homeowner suing Bank of America and ReconTrust, said in a telephone interview that she’s “ecstatic” about the ruling. She received a default notice after seeking a loan modification from Bank of America and going through a trial period. When she received the notice at her Pahrump, Nevada, home, she contacted the bank and learned she didn’t qualify for the modification, she said.
“I think it’s great because I’m not the only one in this boat,” North said about the judge’s order.
Nevada had the highest U.S. foreclosure rate in 2010 for the fourth consecutive year, with more than 9 percent of the state’s households receiving a filing. Arizona was second at 5.7 percent and Florida third at 5.5 percent.
Jumana Bauwens, a Bank of American spokeswoman, said ReconTrust faced such an order in Utah and “prevailed in challenging that order in federal court.”
“Until the current situation is resolved, ReconTrust intends to comply with the order,” Bauwens said by e-mail. She didn’t respond to a question about how many properties are affected by the ruling.
John Christian Barlow, a lawyer who represents North, said the lawsuit claims ReconTrust doesn’t have the authority to foreclose on homes in Nevada. Bank of America and other banks use ReconTrust to seize homes in Nevada, he said. Barlow said he will seek class-action, or group, status for the lawsuit.
“If a company’s going to foreclose, they’ve got to do it right,” he said.
The case is North v. Bank of America Corp., CV31506, Fifth Judicial District, Nevada, Nye County.
Editors: Fred Strasser, Charles Carter
To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

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