There have been lots of lawsuits filed in Nevada centering on various aspects of the foreclosures in the state. Recently the court ruled that home mortgages which are registered with the Mortgage Electronic Registration System, Inc. (MERS) may be put into foreclosure after some technical adjustments.
MERS was created in the mid 1990s by banks. It is a database which tracks mortgages as they are sold. Notes and deeds of trust no longer needed to be recorded with the county recorder every time the mortgages they secured were sold. Since the promissory note and deed of trust no longer were together, arguments have been made that foreclosures cannot be made unless the lender holds both documents. The court decided that if the deed is returned to the lender, the foreclosure may then proceed. In other words, the holder of the deed of trust, MERS, need only return the deed to the holder of the promissory note. The notice of default, the first step in the foreclosure process, may then be recorded.
See the entire article in the Las Vegas Review Journal.
Will this ruling mean there will be an increase in Notices of Default? Probably, although we already are seeing some increase as banks make the changes necessary to follow Nevada law. The truth is, foreclosures have slowed down across the country as banks sought to offer alternatives to homeowners. However, since most people don’t open mail from banks if they are not paying their mortgages, they miss opportunities which may be offered. As a result, the banks are left with little alternative. I always advise people to open their mail from the bank. There may be a pleasant surprise in it.