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Nevada Supreme Court Reversed & Remand – “Mediation, Sanctions, MERS Failed To Produce the Deed of Trust & Any Assignments” | HEREDIA-BONNET v. LOANSTAR

Nevada Supreme Court Reversed & Remand – “Mediation, Sanctions, MERS Failed To Produce the Deed of Trust & Any Assignments” | HEREDIA-BONNET v. LOANSTAR


IN THE SUPREME COURT OF THE STATE OF NEVADA

ANGELA HEREDIA-BONNET,
Appellant,

vs.

FIRST AMERICAN LOANSTAR
TRUSTEE SERVICES, LLC, A
FOREIGN ENTITY AND MERS, A
FOREIGN ENTITY,
Respondents.

ORDER OF REVERSAL AND REMAND
This is an appeal from a district court order denying a petition
for judicial review in a foreclosure mediation action and a post-judgment
order denying an NRCP 60(b) motion for relief from the initial order.
Second Judicial District Court, Washoe County; Patrick Flanagan, Judge.

Following an unsuccessful mediation conducted under
Nevada’s Foreclosure Mediation Program (the Program), appellant Angela
Heredia-Bonnet (Bonnet) filed a petition for judicial review in district
court. Among other things, Bonnet contended that respondent MERS’
conduct was sanctionable because it failed to produce certain required
documents at the mediation.’ See NRS 107.086(4), (5). The district court
denied Bonnet’s petition and ordered that a foreclosure certificate be
issued. As explained below, we reverse.

Standard of review

“[W]e. . review a district court’s decision regarding the
imposition of sanctions for a party’s participation in the Foreclosure
Mediation Program under an abuse of discretion standard.” Pasillas v.
HSBC Bank USA, 127 Nev. „ 255 P.3d 1281, 1286 (2011).

MERS failed to produce the required documents

To obtain a foreclosure certificate, a deed of trust beneficiary
must strictly comply with four requirements: (1) attend the mediation, (2)
participate in good faith, (3) bring the required documents, and (4) if
attending through a representative, have a person present with authority
to modify the loan or access to such a person. NRS 107.086(4), (5); Leyva
v. National Default Servicing Corp., 127 Nev. „ 255 P.3d 1275,
1279 (2011) (concluding that strict compliance with the Program’s
requirements is necessary).

NRS 107.086(4) states that the deed of trust beneficiary or its
representative “shall bring to the mediation the original or a certified copy
of the deed of trust, the mortgage note and each assignment of the deed of
trust or mortgage note.” Moreover, the Foreclosure Mediation Rules
(FMRs) require the beneficiary or its representative to conduct an
appraisal of the homeowner’s home. FMR 11(3)(b).

Here, the record demonstrates that MERS failed to produce
the deed of trust and any assignments. 2 Moreover, it failed to conduct an
appraisal of Bonnet’s home. Because MERS failed to strictly comply with
the Program’s requirements, the district court abused its discretion in
ordering a foreclosure certificate to be issued. Leyva, 127 Nev. at , 255
P.3d at 1279; Pasillas, 127 Nev. at , 255 P.3d at 1286.

On remand, the district court must determine how MERS
should be appropriately sanctioned. Pasillas, 127 Nev. at , 255 P.3d at
1286-87 (construing NRS 107.086(5) to mean that a violation of one of the
four statutory requirements must be sanctioned and that the district court
is to consider several factors in determining what sanctions are
appropriate). Accordingly, we

ORDER the judgment of the district court REVERSED AND
REMAND this matter to jtttAistrict court for proceedings consistent with
this order. 3

FOOTNOTES:

1The record indicates that a non-party, Chase Home Financing,
LLC, attended the mediation. Because MERS maintains that Chase
attended the mediation on its behalf, Chase’s conduct at the mediation is
properly imputed to MERS for purposes of this appeal.

2We recognize that Bonnet’s original lender may still own her loan,
in which case no assignments would exist. However, MERS’ inability to
verify who currently owns Bonnet’s loan necessarily means that MERS
was unable to confirm that no assignments needed to be produced.

3In light of the above disposition, Bonnet’s motion for summary
remand is denied as moot. Likewise, Bonnet’s appeal from the district
court order denying her motion for NRCP 60(b) relief is dismissed as moot.
See Estate of LoMastro v. American Family Ins., 124 Nev. 1060, 1079
11.55, 195 P.3d 339, 352 n.55 (2008).

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