HSBC Hauled Up by Nevada Supreme Court
Photo by The-Lane-Team
When Emiliano Pasillas bought his brand new house in 2006 he did not know that it would lead to the making of history in foreclosure happenings. Five years afterwards the Supreme Court of Nevada gave a ruling in his favour saying that the plaintiff HSBC Bank could not foreclose as it had not acted in good faith in two sessions of foreclosure mediation with Pasillas.
The programme involving mediation started in 2009 after passage of necessary bill by the Legislature in Nevada. The programme mandated that if the bank failed to act in good faith then sanctions would be imposed on it. Prior to the case going up to Supreme Court, the case had been refused a review by Judge Patrick Flanagan of District Court. Foreclosure was ordered. It was stalled by the appeal made to the Supreme Court.
The case returned to Washoe County District Court after the Supreme Court ruling. This time Flanagan ruled that HSBC would bear all mediation expenses and other costs but the amount would be paid, not to Pasillas, but to Washoe Legal Services.
Lawyer Keith Tierney refers to Flanagan’s interpretation of the Supreme Court view to be extremely lenient; the normal way would be for the money to be given to the house owner. He said, “At least that’s what you see in the East Coast, where courts have been coming down strongly on the side of the homeowners in cases like this”.
Lawyer Terry Thomas, representing Pasillas was highly critical of the order issued by Flanagan. He said such light sanctions would not deter the banks – they would continue to act sans any good faith. He added that the third round of mediation suggested by Flanangan was not much of a sanction.
Thomas quipped, “This sanction is a perpetual do-over, plus few bucks to charity, which (the lender) can deduct as a contribution to a 501c3.” He did not think that paying this amount of $2,500 was merely a “slap on the wrist” for the bank. The net result was that the banks could do anything without a hint of good faith during mediation sessions – reducing the latter to a farce.
Flanagan refused to meet the media asking for a story on this issue. He explained that no comments could be made on an ongoing case.
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