Question of “Bad Faith” Mediation reaches Nevada Supreme Court

Last week, the Nevada Supreme Court heard arguments in a case alleging that a lender participated in Nevada’s mandatory foreclosure mediation program in bad faith. The 2009 law that established the program allows district court judges to sanction parties if they are found to have acted in bad faith. The homeowners argued that the lender acted in bad faith by failing to produce required documents and failing to participate in the negotiation process. District Court judge Donald Moseley rejected that claim, and the Nevada Supreme Court must now decide what constitutes good and bad faith participation in the foreclosure mediation program.

Judge Moseley, incidentally, has said that he will not modify mortgages even though the 2009 statute gives him the power to do so, because he believes to do so would constitute an unlawful taking.

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