“Robosigning,” or the practice of mortgage lender employees processing foreclosure documents without personal knowledge of the case, has been a source of litigation nationwide. Advocates for property owners in foreclosure say that robosigning has led to errors that have unfairly caused some people to lose their homes. However, the Nevada Association of Realtors said, laws to restrict robosigning have harmed the real estate industry in the state.
With the Nevada Legislature’s 2013 session opening yesterday, the association is asking lawmakers to amend a recently enacted statute that makes robosigning more difficult. The law went into effect in October 2011. Since then, the real estate industry says, foreclosures have dropped significantly. The foreclosure rate in Nevada dropped 57 percent from 2011 to 2012 and the number of sales of foreclosed homes has also gone way down as a percentage of all sales.
Of course, there are several reasons that foreclosures are down in Nevada, including improvement to the economy and nationwide litigation settlement that gives banks incentive to accept mortgage renegotiations and short sales. But the 2011 law, which requires lenders to provide a signed affidavit swearing they have personal knowledge of the documentary history of a house in default before they execute foreclosure documents, has had an onerous effect on the real estate market by keeping home in default in the hands of the homeowners.
If the Legislature chooses to take another look at the robosigning statute, it will have to balance the rights of homeowners with the interests of local business.
Source: VEGAS INC, “Association of Realtors pushing for clarification on robosigning,” Eli Segall, Feb. 4, 2013
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