## Facts

- Emiliano and Yvette Pasillas bought a home in Reno, Nevada, in 2006 using a loan from American Brokers Conduit, secured by a deed of trust.
- The note and deed of trust were allegedly assigned to HSBC Bank USA as trustee; AHMSI allegedly serviced the loan, and Power Default Services became substitute trustee in late 2009.
- After the borrowers defaulted and received a notice of election to sell, they elected to participate in Nevada’s Foreclosure Mediation Program (FMP) under NRS 107.086.
- Two mediations occurred (February 18 and March 8, 2010) without resolution.
- An AHMSI representative was available by telephone, but it was unclear whether a party with authority to modify the loan was present or accessible, and whether HSBC was specifically represented.
- The mediator concluded respondents failed to produce required documents and failed to have a person present or accessible with authority to modify the loan, constituting a lack of good-faith participation.
- The mediator recommended that foreclosure not be allowed to proceed.

## Issues

1. Whether a lender’s failure to produce FMP-required documents and to have a person with authority to modify the loan present or accessible during mediation constitutes a sanctionable violation of NRS 107.086 and the Foreclosure Mediation Rules.
2. Whether the district court erred by denying judicial review and allowing certification to proceed despite the mediator’s findings of noncompliance.

## Decision

- The Nevada Supreme Court reversed the district court’s order denying the homeowners’ petition for judicial review.
- The court held that failure to produce the required mediation documents and failure to have an authorized loan-modification decision-maker present or accessible are sanctionable offenses under NRS 107.086 and the Foreclosure Mediation Rules.
- The matter was remanded for the district court to determine appropriate sanctions.
- Foreclosure certification may not be directed until the parties fully comply with the statute and rules governing foreclosure mediation.

## Legal Principles

- NRS 107.086 and the Foreclosure Mediation Rules require production of specified documents during foreclosure mediation and require that a person with authority to modify the loan be present or accessible.
- Noncompliance with these requirements is sanctionable, and the district court must withhold foreclosure certification until full compliance occurs.
- The FMP’s “good faith” participation requirement includes meaningful document production and access to an actual decision-maker capable of negotiating loan-modification terms at mediation.

## Conclusion

The court required strict enforcement of Nevada’s foreclosure mediation requirements, holding that document-production failures and lack of an accessible, authorized loan-modification decision-maker are sanctionable and prevent foreclosure certification until cured.


Pasillas v. HSBC Bank USA, 255 P.3d 1281 (Nev. 2011)