Kristin Schuler-Hintz is the Managing Partner for the Nevada office of McCarthy & Holthus, a member of the Legal League 100. Kristin is a frequent guest speaker at continuing legal educations on the subject of foreclosure mediation and lender/servicer related issues and she is admitted to practice law before all the courts in the states of California and Nevada. Kristin recently spoke with DS News about the hotly-contested issue of "super-priority" liens in Nevada as well as the rate of housing recovery in the state.
What is the latest on the super-priority lien issue?
There is a lot of litigation pending on the notice requirements. There is a feeling that the case didn't answer as many questions as people would like to think it did. All it said was, "If there's a foreclosure, it would wipe out the first deed of trust." It didn't address the questions related to whether or not the foreclosure was valid, whether it was for a commercially reasonable price, or even things related to whether notice was properly given. There is still a lot of litigation on these issues that remains to be completed and determine how this is all going to shake out. It's a little too early to tell how that's going. We're still in our legislative session, so there are a lot of things going on with that. The legislative session ends around the end of May or beginning of June.
Have you successfully litigated any of these cases?
None of the cases have gone to trial yet, and where we are is pretty much a very fact-specific discovery on the issues. Trials for those cases are just starting to get scheduled. Whichever way the first trial goes, there is likely to be an appeal, so we're years away from having this resolved.
It's important to remember the HOAs and their attorneys each have an interest in prevailing. What has been ignored is the borrower who loses his or her home without mediation and lenders who lose their interest without notice.
What other issues are currently affecting the default servicing industry in Nevada?
Nevada was hit very hard by the recession, and the legislature took some pretty aggressive steps to try to help people out. We've had a slow recovery here in Nevada. It does provide an interesting dichotomy when you look at the different states. Some states have done a lot to try to help homeowners with their recovery, and some states haven't done as much and have let the crisis play out. I think somewhere out there is an economics or business professor who has got a great book on whether or not government stepping in to “help” is really "helping," or what the end result of all of this is.
Fortunately many of the other legal challenges such as the validity of MERS, or “show me the note” defenses, standing, and grounds for foreclosure have been resolved so there is some amount of certainty once again in the mortgage default world in Nevada.
Has the recovery been slower in Nevada than it has in other states?
You only need to look at our neighboring state of Arizona compared to Nevada. The State of Nevada changed the foreclosure process and implemented a mediation process that had the best of intentions. When the mediation program started it was unprepared for the numbers it saw and starting in July 2009 foreclosure began to be incredibly delayed. Then in 2011 the legislature implemented AB284 and foreclosures came to a stand still for about a year. It’s only been since about September 2014 that the foreclosure process has started to steady and return to what I would call the “new” normal. I am not an economist but Nevada did not have a swift housing recovery like that of Arizona. Again, some professor can do the analysis. Nevada isn’t where it was before the housing bubble burst.