In an effort to “clarify and streamline” the foreclosure mediation process in Nevada, the Nevada Supreme Court has updated the rules of the Nevada Foreclosure Mediation Progam (FMP)[1]. Chief Justice Michael L. Douglas emphasized that “periodic revisions…have always been anticipated…to ensure that the program works for those who need it and use it – both homeowners and lenders.” The rules changes include clarification on forms to be provided, deal with how temporary modifications are handled and require that homeowners be given a date to vacate the premises when they agree to relinquish a home. Furthermore, homeowners can now sign over power of attorney to someone who is representing them.

Nevada’s FMP has been controversial from the start, and one state attorney has filed an appeal for his client, claiming that state judges have “made a mockery of the FMP” by “predetermining” the outcome of cases and settlement talks before ever entering the process. Some judges have stated publicly that they will not modify loans from the bench even when lenders may have negotiated those loans in bad faith. The original 2009 Nevada FMP legislation gives judges the authority to do this if lenders “fail to abide by Nevada FMP guidelines”[2]. By refusing to make modifications from the bench, the attorney in the appeal says that essentially the outcome of the mediation is predetermined if the lender fails to behave ethically and in accord with FMP requirements, leaving the homeowner with no recourse. Some judges consider the idea of modification from the bench not only distasteful, but illegal since “giving judges unlimited authority to modify loans could intentionally or inadvertently harm lenders financially,” which would be a violation of due process, explained UNLV law professor Thomas McAffee.

The modification timeline has also been expanded to 30 days.

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[1] http://www.mortgageorb.com/e107_plugins/content/content.php?content.7871

[2] http://www.lvrj.com/news/judges-accused-of-predetermining-foreclosure-cases-116525958.html