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Dean's Column: Foreclosure Mediation Community Service at the Boyd School of Law

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DEAN’S COLUMN
NOVEMBER 2009
N EV A D A L A W Y ER
FORECLOSURE MEDIATION COMMUNITY SERVICE AT THE BOYD SCHOOL OF LAW
BY GUEST WRITER PROF. STEVE JOHNSON
“It is no secret that, for many Nevadans, the current economic environment is the most challenging in their lifetimes.”
Community service is a key part of the mission of the William S. Boyd School of Law. Previous installments of this column have described several facets of community service by the students, faculty and staff of the Boyd School of Law. This installment describes the newest addition to our community service initiatives: educating the public about the foreclosure mediation process established under Assembly Bill 149 enacted in the past session of the Nevada Legislature. One of the distinctive features of the legal education offered at the Boyd School of Law is our Community Service Program. All Boyd students participate in the program. Under attorney supervision, and in cooperation with the Legal Aid Center of Southern Nevada (LACSN), teams of students are trained to prepare and conduct weekly workshops providing basic legal information to Nevadans who otherwise might not have access to such information. In the 11 years of the existence of the Boyd School of Law, the Community Service Program has helped nearly 30,000 Nevadans, addressing areas of the law such as bankruptcy, basic procedures in family court and small claims court, paternity, custody and guardianships. We have now added foreclosure mediation to the areas covered by the Community Service Program. This responds to a critical need identified by the state. Nevada has the unenviable distinction of having one of the country’s highest rates of mortgage foreclosure. When AB 149 was first introduced in the Legislature, lenders sometimes were not modifying loans even when it seemed to be in their own interest to do so. Many homeowners were frustrated in their efforts to negotiate with their lenders. Some could not even reach a lender’s representative to discuss their loans. AB 149 requires mandatory mediation in order to increase
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the responsiveness of lenders and to afford homeowners an opportunity to negotiate with lenders after the filing of foreclosure. Homeowners who participate in foreclosure mediation often will not be represented by counsel. Unrepresented homeowners may be confused about the procedures and potentialities of mediation, and mediation may fail to fulfill its promise as a result. The foreclosure mediation component of the Community Service Program is designed to address this problem. The first class was held on September 17 at the Boyd School of Law, in collaboration with LACSN and the Nevada Fair Housing Center. That class was taught by Michael Joe, a Boyd alumnus and an attorney with LACSN. It was well attended and several Las Vegas television stations and newspapers covered the event. Subsequent classes are being given each week and are being taught by a cadre of Boyd School of Law students. Each attendee of the foreclosure mediation classes in the Community Service Program receives extensive written materials. The materials first provide important background information, describing the players in the mortgage and mediation contexts, explaining the nature of home loans and foreclosures, setting out a glossary defining frequently used real estate and foreclosure terms, and giving sample documents. Without rendering legal advice, the class and the written materials help the attendees decide whether participation in foreclosure mediation is right for them, by describing who is eligible to participate, explaining both the advantages and the costs and limitations of mediation, and setting out the timeline characteristic of the process. For homeowners who choose to participate in the program, the class and the materials detail how to elect participation,
N EV A D A L A W Y ER
NOVEMBER 2009
how to complete required forms, what documents the homeowner must provide and what obligations are imposed on the homeowner’s lender. They also describe the types of options typically offered by lenders, including repayment plans, refinancing and loan modification. This information includes how to get a loan modification, what makes for a good loan modification and the effect of the Obama Plan on loan modification. Most lenders require the homeowner to have hardship before they will consider loan modification. The class and the written materials define hardship, explain how to write a letter establishing the existence of hardship and provide sample hardship letters. In addition, homeowners are required to submit proposals for resolving the foreclosure. The class and the materials set out suggestions for preparing a proposal and provide several sample proposals. The class and the written materials aim to make homeowners more effective in the foreclosure mediation process. To this end, they tell homeowners of the information they need to marshal in advance of the mediation, the format
of the mediation, the “dos and don’ts” in order to maximize the utility of the process, and what to do after the mediation. It is no secret that, for many Nevadans, the current economic environment is the most challenging in their lifetimes. The Nevada Legislature responded to this extraordinary need by enacting AB 149, and the Nevada Supreme Court responded by crafting the mechanisms to implement and fulfill the mandate of the new legislation. The Boyd School of Law is contributing to the response by helping to train mediators through our Strasser Mediation Clinic and, in collaboration with our program partners, by providing information to homeowners through the Community Service Program.
STeVe JOHnSOn is the E.L. Wiegand Professor and Associate Dean for Faculty Development and Research at the William S. Boyd School of Law. He is a frequent speaker at law conferences throughout the United States and has authored numerous books and articles. His work has been cited by the United States Supreme Court and many other courts, administrative agencies and commentators.
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