I-Team: Nevada Lags in Enforcing Mortgage Settlement - 8 News NOW

I-Team: Nevada Lags in Enforcing Mortgage Settlement

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Edie Johnson Edie Johnson

LAS VEGAS -- Some Nevada families who have received checks from the government call it a "slap to the face" after losing their homes to foreclosure.

But as two major banks are getting sued in New York for continuing improper foreclosures, Nevada's attorney general remains silent on the issue.

The mortgage settlement announced February 2012 was supposed to punish banks if they violated any of 300 new homeowner protections.

As the I-Team discovered, there's major problems with that goal.

Edie Johnson looks through her box of photos. Edie's late mother owned a home on Damon Drive since the 1980s. The family fought with Wells Fargo Bank to stay in their home through three trial payments and three modification attempts over three long years.

"We invested in that home. We invested our lives and our family and for them to take the situation the way they did, it was very unfortunate. It was very disappointing," Edie Johnson said.

Her path to eviction sounds familiar to many Nevadans. She says the banks repeatedly lost her paperwork and gave contradictory answers on the phone. What surprised her the most, wasn't the surprise eviction notice, it was the check that came in the mail a year later from the Office of the Comptroller of the Currency.

"I looked at it, and I shook it - $500. That was my American dream. I didn't even want to cash it. It was a slap to the face," she said.

But when Nevada Attorney General Catherine Cortez Masto signed the settlement and dropped her lawsuits against major banks, she told homeowners it would prevent banks from obstructing future home loan modifications.

New York's attorney general holds more than 300 complaints his office received from homeowners claiming banks continue to violate homeowner protections.

"In just six months, against Wells Fargo and Bank of America, for failure to comply with the most basic provisions of the servicing settlement," New York Attorney General Eric Schneiderman said. 

He announced a lawsuit against Bank of America and Wells Fargo.

The banks responded in statements saying they are taking the complaints seriously and will work quickly to address them. New York's lawsuit stands in contrast to Nevada's response to lending banks.

Cortez Masto's office says 41 Bank of America complaints and 14 Wells Fargo complaints came in since the settlement.

But when the I-Team asked what Nevada's attorney general was going to do about these violations, her office's response was they "have nothing further to say on the subject at this time."

Feb. 2012 was one of the last times Cortez Masto addressed what she intended to do with future bank violations.

"I can look them in the eyes because of a couple of things. We're still pursuing lawsuits. We're still holding individuals accountable and we haven't stopped," she said.

Edie Johnson's home is lost. Another family bought it for $48,000. That's far less than what the Johnson family was willing to pay to keep their house.

"It was my home. It was my family's home. To add insult to injury, as to give me a band-aid, made me feel they thought I was stupid," she said.

As the I-Team pointed out in Jan. 2013, major banks say they've nearly reached the end of their financial obligation to help homeowners under the terms of the settlement.

Cortez Masto's office says more checks from the National Mortgage Settlement will be sent to Nevada homeowners in the coming months.

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