Seven months ago, Pahrump homeowner Suzanne North gained national attention with her lawsuit single-handedly halting thousands of Nevada foreclosures, at least for 11 days.
Now, a judge has quietly dismissed her suit claiming she was misled by Bank of America and that a B of A subsidiary had no authority to foreclose on her home. Those allegations simply lacked merit, U.S. District Judge Roger Hunt found in an order issued last week.
North’s case is one of hundreds – if not thousands – filed in Nevada as foreclosures soared during the recession and desperate homeowners turned to the courts for help.
Acting without an attorney, North flooded the court with hundreds of pages of legal arguments.
Initially, she was successful. A ruling in her favor by Nye County Judge Robert Lane on Jan. 20 halted work on more than 8,900 foreclosures in the state.
North charged in her suit that a Bank of America subsidiary, ReconTrust Company N.A., couldn’t foreclose on her because it was not the trustee in her mortgage when it initiated foreclosure proceedings.
North also complained she had been misled by Bank of America when it told her she may be eligible for a loan modification if she missed three consecutive payments. She did just that, but was then hit with a foreclosure notice.
Bank of America, represented by at least three expert foreclosure attorneys from Las Vegas and Richmond, Va., convinced Hunt on Jan. 31 to allow Bank of America foreclosures to proceed statewide as North, they said, had no chance of winning her lawsuit.
The case was finally closed last week when Hunt issued his dismissal order.
Nevada law clearly allows agents of mortgage loan beneficiaries to file notices of default and that’s what happened with North, with ReconTrust acting as the agent for Bank of America, Hunt ruled.
"Because Nevada law allows an agent to file a notice of default, plaintiff fails to state a claim that the notice of default was improper," Hunt ruled.
As for her claim that Bank of America misled her about the possibility of a loan modification, Hunt stressed in his order that, at least according to North, there was no guarantee of a modification and that she had only been told a modification was possible.
"Plaintiff admits she missed three payments, thereby putting her account in default. Plaintiff also admits that, although she believed her modification would be granted, B of A only told her modification was possible," the judge wrote. "Plaintiff decided to miss three payments on the promise of the possibility of modification, and her expectation that the bank would undoubtedly modify her loan was unreasonable."
These facts can’t sustain wrongful foreclosure or slander of title claims, the judge wrote.
Bank of America, however, isn’t off the hook yet over claims it misled Nevada homeowners into thinking they would gain loan modifications – and then foreclosed on them anyway.
A lawsuit filed by Nevada Attorney General Catherine Cortez Masto over those allegations is pending in federal court in Las Vegas. Bank of America has denied the allegations.