(See the posting from Susan Yates, “Learning from the Gamble on Foreclosure Mediation in Nevada,” on this subject, too.)
An article in Sunday’s New York Times examined the shortcomings some see in Nevada’s foreclosure mediation program. The article focuses in part on complaints that the lenders are not participating in good faith. Mediators who have recommended sanctions against the lenders say they have been removed from the program’s roster. They state that they are bound by statute to make the recommendation. The court rule makes no mention of good faith participation, and the Court appears to be relying on the rule in its decision to bar the mediators from the roster.
Leaving aside the question of which authority prevails, I’d like to examine the wisdom of requiring mediators to recommend sanctions against a party. NRS 107.086 states in part:
“If the beneficiary of the deed of trust or the representative fails to attend the mediation, fails to participate in the mediation in good faith or does not bring to the mediation each document required. . . or does not have the authority or access to a person with the authority. . . the mediator shall prepare and submit to the Mediation Administrator a petition and recommendation concerning the imposition of sanctions against the beneficiary of the deed of trust or the representative. The court may issue an order imposing such sanctions against the beneficiary of the deed of trust or the representative as the court determines appropriate. . .”
There has been a good amount of debate about good faith provisions. On the one hand are those who state that good faith is an abstract idea, that it would be hard to enforce and would lead to further litigation, and would reduce parties’ self-determination. When the intervention of the mediator is required, questions of mediator neutrality and confidentiality of the process come into play as well. On the other hand are those who state that mediation could do harm if good faith was not required. The other parties waste money and time by attending the mediation and may lose faith in the judicial process if no sanctions on such behavior are forthcoming.
If there is a real problem with lenders not participating in the Nevada foreclosure mediation program in good faith, and the complaints aren’t just based on misguided expectations of mediation, where does the balance of action lie? Does it lie on the side of the legislature, which mandates good faith and requires mediators to recommend sanctions, thereby reducing the probability of wasted time and money and the homeowners’ loss of faith in the judicial process? Or does it lie on the side of the court, which doesn’t impose such requirements and therefore decreases the likelihood that some of the main tenets of mediation are violated? Or is it somewhere in between?