A foreclosure is the process whereby the lender takes possession of a mortgaged property as a result of the homeowner’s failure to make the mortgage payments. In Nevada, the lenders can foreclose in two ways:
This is the primary method of foreclosure in Nevada and it does not involve court action. It begins when the borrower has missed three to six months of mortgage payments. The lender records a Notice of Default (NOD) with the County Recorder’s Office and posts it on the front door of the property thus giving the borrower notice that he is in danger of losing the property. The borrower has 35 days to cure the default by paying the delinquent amount. If the borrower requests mediation, the lender is prohibited from continuing with the foreclosure.
If the borrower is unable to pay the amount specified in the NOD the lender may start the foreclosure process by recording and posting a Notice of Trustee Sale which specifies the date, time and place of the sale.
The borrower does not have a right of redemption in a non-judicial foreclosure proceeding.
This type of foreclosure is handled through the court system where the lender files a civil lawsuit against the borrower with a foreclosure complaint.
The lender will then record a lis pendens (a lien on the property that gives notice of a pending foreclosure action). If the court grants a judgment allowing the lender to sell the property at auction, the Notice of Foreclosure Sale is published and posted on the property door. The Notice of Foreclosure Sale gives notice of the date, time and place of the auction.
The borrower has one year after the foreclosure sale to redeem the property and mediation may be available during this action.
There are many different ways to stop a foreclosure such as bankruptcy, mediation, modification, short sale and deed-in-lieu of foreclosure.
Schedule a consultation to discuss your options to stopping a foreclosure.
Deed In Lieu
A deed in lieu is an agreement between the lender and the borrower whereby the borrower transfers the title back to the lender in exchange for a release from the mortgage obligation.
In some instances, the lender may require that you attempt to sell your home for at least 90 days before it will consider accepting a deed in lieu.
A deed in lieu is a good option for a homeowner who has no interest in keeping or selling his property but wants to avoid a foreclosure.
This is a better alternative to foreclosure for both the borrower and the lender. The lender avoids the fees and costs associated with a foreclosure and the borrower avoids a deficiency judgment and the stigma of foreclosure.
There may be tax consequences when obtaining a deed in lieu. Consult a tax advisor to better protect yourself.
If you feel a deed in lieu is a good option for you, please contact our office to discuss.
Nevada Foreclosure Mediation
After a filing of a Notice of Default and Election to Sell with the County Recorder, Nevada homeowners are automatically enrolled in mediation. Once the lender provides the homeowner with a copy of the NOD and information on scheduling a mediation, the homeowner must return an Enrollment Form to the Nevada Foreclosure Mediation Program within 30 days of receiving the NOD or within 20 days of receiving a judicial foreclosure complaint. Failure to return the Enrollment Form along with the $200 mediation fee will result in the lender receiving a Certificate from the FMP allowing it to proceed with foreclosure.
Once you have returned the Enrollment Form and the $200 fee, the lender is required to attend the mediation, and have a representative at the mediation who has the authority to negotiate or modify the loan. The lender must also provide the original or certified copy of the Mortgage Note, Deed of Trust and any assignments of the Mortgage Note and Deed of Trust. In addition, the lender must also provide an Appraisal or Broker’s Price Opinion of the property that is dated no more than 60 days from the date of mediation and an estimate of the property’s short sale value. The failure of the lender to follow the above requirements will prohibit it from proceeding with the foreclosure.
The mediation is overseen by a randomly assigned mediator who is a neutral party and cannot give legal advice. The mediator’s role is to oversee the process and make sure that the rules are followed and both parties negotiate in good faith. The mediator has the power to find the lender in bad faith for failure to participate according to the rules and provide the necessary documents. At the conclusion of the mediation, either party has the right to file a Petition for Judicial Review if they disagree with the outcome of the mediation.
Mediation is a confidential process that allows the homeowner the opportunity to sit face-to-face with the lender to discuss the status of the loan and alternatives to foreclosure such as retention (modification) or liquidation (short sale or deed-in-lieu). Mediation allows for a more efficient, cost effective and faster resolution to your mortgage issues.
If you are in danger of losing your home to a foreclosure, contact LJ Law. Our attorneys have many years of experience representing all the major banks and will use their in-depth, inside knowledge of the banks guidelines and requirements to your advantage and get you the best possible result for your situation. We can save your home from foreclosure.