Apparently requiring banks to produce proof of ownership before foreclosing on someone is too hard.
Up for discussion is a 2011 law in Nevada that criminalizes foreclosure fraud. In essence, it restates the obvious: Only foreclosure if you’re legally entitled to do so. However, it places the people initiating the foreclosure process on notice by making them sign an affidavit attesting to their personal knowledge of the documentation history that supports the foreclosure.
Banks would like the law repealed, which would allow them to initiate foreclosure proceedings with less stringent proof.
The law isn’t a bad thing for people in danger of foreclosure, of course, because it forces the lenders to have their ducks in a row first. If the original mortgage documents were done hastily then their whereabouts could be challenging to track down, or their validity could be called into question. There have been more than a handful of cases for which the banks have foreclosed wrongly, be it without an actual default, or on the wrong person.
The housing market continues to be a mess for many people, including the bankers — if for no other reason than they have to sort out their paperwork first.