Foreclosure mediation


The folly of political interventions in the decimated housing market was on full display Tuesday before the Nevada Supreme Court. Justices heard three appeals related to the state's Foreclosure Mediation Program, which was created in 2009 to give hardship-suffering homeowners a chance to stay in residences that otherwise would be seized by banks.

The common thread in all three cases: banks not bringing required documents, not sending representatives with the authority to modify a mortgage, and not proposing reasonable solutions. Justices clearly were sympathetic to homeowners' arguments that lenders were acting in bad faith, in defiance of program rules.

The other shared trait, of no importance to the court: a homeowner not paying the mortgage, seeking to abrogate a contract.

The District Court judges who handle mediation reviews agree that loans won't be modified from the bench. And it's reasonable for bankers, as unsympathetic as they are, to insist that borrowers honor the terms of their loans or default.

So where does the Supreme Court take this impotent, unhelpful program from here? Attorney Jacob Hafter offered a suggestion Tuesday: "They can impose a $50,000 sanction for bad faith and give that to the homeowner." Less attorney fees, of course.

If the Foreclosure Mediation Program becomes another forum for a shakedown, the Legislature should shut it down.

Every attempt by politicians to help our housing woes has prolonged the pain. Leave it alone already -- no matter how much it hurts.

 

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