LAS VEGAS -- Nevada still leads the nation in foreclosures, but now homeowners going through the process have the Supreme Court on their side in mediation and several options for free help.
The state's highest court ruled banks and lenders must bring all documents to the foreclosure mediation or face consequences. Attorneys think this will speed up the process and make it harder for banks to force foreclosure.
The state's foreclosure mediation process started two years ago. Since then, thousands of homeowners have gone through it trying to modify their loans and stay in their homes but have ended up foreclosing because the banks wouldn't agree or wouldn't come prepared to the mediation. Now, that changes.
On July 1, 2009, Nevada's mediation program began. Seven days after, Moises Leyva filed his mediation request. Two years and many court appeals later, the Nevada Supreme Court ruled in his favor, saying his bank, Wells Fargo, didn't have the right documents or decision-makers at his mediations and should face consequences.
Leyva's attorney, David Crosby, said banks took advantage of him.
"They lose the paperwork, they can't track it, they can't keep up with it, they have multiple addresses -- it's a mess," he said.
Crosby says it's a double-standard. Homeowners have to stop paying their mortgage and take hits to their credit just to get to mediation. They also have to bring all kinds of financial documents once they get to the table, while the bank's representatives walk in blind.
"Many times, they don't even look at the paperwork in advance. They get to the mediation and they start looking at it then, and it's like, 'You guys didn't even prepare, how are you going to help me save my house when you don't even know what's going on with this case?' They'll say we'll look at it, we'll ask a few questions, we'll put it in a computer and do a mechanical calculation which in my opinion can be done by a well-trained chimpanzee," said Crosby.
Crosby isn't alone. Legal Aid of Nevada has provided free legal help to a thousand homeowners going through the mediation process. They too want to see more accountability for banks coming to the table.
"I think what we'd like to see happen is that the banks will act more responsibly and do what the law says, and if they don't, there will be consequences," said Legal Aid foreclosure attorney Michael Joe.
it's still unclear what those consequences will be since those were not written into the Supreme Court's decision.
There is free help for homeowners wanting to go through the mediation process. Legal Aid offers free classes every Thursday at UNLV's Law School and HUD, along with other public agencies, offer free help.
