Nevada 'Model Affidavit' May Preclude Nonjudical Foreclosures in Nevada
Michael R. Brooks, Esq.
The Nevada Attorney General’s office has provided a “Model Affidavit” as required by AB 284 which closely tracks the language of the Bill. However, the Model Affidavit makes no provision for the use of hearsay testimony based on the business records exception. As a result, questions have arisen concerning the Nevada Attorney General’s reading of the “personal knowledge” requirement and whether it can be based on otherwise proper hearsay testimony.
“The Affidavit confirms that the language of AB284 could cause serious problems for most trustees, servicers and beneficiaries,” said Michael R. Brooks, Esq., Brooks Bauer, LLP. “Specifically, the Model Affidavit requires that the Affiant testify based on ‘personal knowledge’. In contrast, most statements or testimony from a beneficiary, servicer or trustee is based on the business records exception to the hearsay rule.”
“There are strong arguments in favor of a broad reading of AB 284’s ‘personal knowledge’ requirement. However, if the statutory language is interpreted strictly, it appears that the affidavit could preclude nonjudical foreclosures in Nevada,” said Brooks. To date, attempts by UTA members to obtain clarification from the Nevada Attorney General have been declined with the Attorney General’s office stating that the courts will have to determine the meaning of personal knowledge pursuant to the statute.
Brooks has advised of an additional concern raised by AB 284 relating to the new requirement to record assignments. “Many in the default servicing industry are concerned about the full meaning of the newly enacted requirement that assignments must be recorded to be enforceable.Specifically, many are concerned that the effect of the new law will require a full chain of assignments from originator to current beneficiary, even if those assignments were never intended to be recorded.” As with the personal knowledge requirement, attempts by UTA members to get clarification from the Nevada Attorney General were unsuccessful. Brooks added: “The net result of all this uncertainty is that any party seeking to do a non-judicial foreclosure must do so knowing that they risk being sued, and possibly prosecuted.”
Effective October 1, 2011, without an Affidavit, a nonjudicial foreclosure may not proceed. According to Brooks, “If the Affidavit cannot be signed, or the assignments not properly recorded, then it would seem that the all foreclosures must be judicial. This seems an absurd result for a number of reasons.” Brooks offers that there seems to be some movement among the parties and that the UTA is continuing work toward a resolution for all involved.
Read Model Affidavit