Bid to oust judge in foreclosure case hearings fails

An attempt to disqualify District Judge Donald Mosley from hearing judicial reviews of failed foreclosure mediations, based on allegations Mosley favors lenders over distressed homeowners, failed Wednesday.

Chief District Judge Arthur Ritchie determined Mosley has been "even-handed" in his rulings from the bench, and that the judge did not violate judicial canons last month when he said neither he nor Washoe County District Judge Patrick Flanagan would modify loans or interest as a sanction despite Nevada Supreme Court rules allowing modifications as an "appropriate sanction" under foreclosure laws enacted less than two years ago to address the crisis.

In an effort to streamline and lend efficiency to the process, the two judges are the only ones in the state that hear judicial reviews. The Nevada Foreclosure Mediation Program makes it mandatory for lenders to sit down with borrowers and make a valid effort to renegotiate mortgages.

"No proof of bias has been shown," said Ritchie. "What is shown is the judge rejects the premise he can modify the loan balance or interest rate. It would be bias if he did in one case and not another."

The controversy began Oct. 8 when Mosley told attorney Jacob Hafter that he and Flanagan agreed the Legislature's decision to allow judges to modify loans or interest rates would be unconstitutional.

"You can't take people's property without due process," said Mosley in an Oct. 8 interview.

Ritchie said the legality of such sanctions is a question that is "ripe" for the Nevada Supreme Court to hear. In fact, Ritchie said the high court was anxious to have an appeal filed so it could schedule oral arguments, possibly on an expedited basis.

Hafter said his clients -- and tens of thousands of other embattled Nevada homeowners -- shouldn't have to wait for the high court to decide their fate. "What do I tell my clients," said an emotional Hafter. "They know coming in that a bad faith finding means nothing."

Ritchie said judges Mosley and Flanagan have been "eerily" fair to both sides with neither side winning more often than the other. He also said at least one significant sanction of $50,000 was levied against a lender found to have acted in bad faith.

Following the hearing, Hafter said the district court should have acted because people can't afford to take their cases to the high court.

"I'm doing these judicial reviews for free," he said. "But I can't afford to do that anymore."
Ritchie following the hearing said he is keenly sensitive to the plight of homeowners facing foreclosure and said he hoped the matter is brought to the Supreme Court sooner rather than later. "They are waiting for an appeal to be filed," he said.

Hafter, who's appealing Mosley's Oct. 8 decision on other grounds, doesn't think the high court will have to wait too long.

"Now, with this, everybody is going to want to appeal,'' Hafter said.

Contact Doug McMurdo at dmcmurdo@reviewjournal.com or 702-224-5512 or read more courts coverage at lvlegalnews.com.