In an op-ed in the Las Vegas Review-Journal which is largely about refinancing tools, HUD Secretary Shaun Donovan gives the Obama administration a heavy does of credit for a recent drop in Nevada foreclosure filings.
Too many homeowners in Nevada are still underwater or struggling to meet their mortgage, but the state has made real progress. Thanks to tools this administration has provided, foreclosure filings throughout the state have fallen 67 percent since last April.
Unfortunately it looks like the Obama administration is claiming credit for something they have zero right to. Last November, after Nevada passed an anti-robosigning law, foreclosures dropped 88%. The law made robosigning illegal, making it functionally impossible for banks to foreclose on the overwhelming majority of homeowners. That had less than nothing to do with the Obama administration.
Foreclosure filings in Nevada plunged in October during the first month of a new state law stiffening foreclosure-processing requirements.
Slightly more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by ForeclosureRadar.com, a real-estate website that tracks such filings. Default notices represent the first step in processing foreclosures.
Nevada’s state Assembly passed a measure that took effect on Oct. 1 designed to crack down on “robo-signing,” where bank employees signed off on huge numbers of legal filings while falsely claiming to have personally reviewed each case. Banks suspended their foreclosure filings one year ago and have gradually restarted them after those and other improper foreclosure-processing practices surfaced.
Among other steps, the Nevada law makes it a felony—and threatens to hold individuals criminally liable—for making false representations concerning real estate title. Individuals are also subject to civil penalties of $5,000 for each violation.
Foreclosures stopped because banks in Nevada can’t prove that they have a right to foreclose on Nevadans without running risk of going afoul of this law. Felonies are serious things and most bankers and their attorneys don’t want to go to jail for fraudulently foreclosing on someone. That’s the biggest reason foreclosure filings are down in Nevada and it has nothing to do what little the Obama administration has done on housing.