Nevada Foreclosure Mediation Program Helps Thousands of Homeowners

On December 7, 2009, in Mortgage, Real Estate, by blacklobellolaw

bILLSNevada Supreme Court Justice James W. Hardesty announced that more than 3,400 homeowners who received notices of default have requested mediation in the Nevada Foreclosure Mediation Program as they seek to hold on to their homes.  Since the program first began on July 1, 2009, 372 mediations have been conducted and another 805 mediations have been scheduled.  An additional 1,401 cases have been assigned to mediators, who are working to schedule and hold those mediations within 90 days of the notices of default being recorded.  Justice Hardesty announced that the statistics are current as of November 16, 2009

Important Note to Homeowners:  If you receive a “Notice of Default and Election to Sell,” you must sign the application form and mail it with $200.00 in certified funds within 30 days from the day you receive your notice to seek mediation.  You should receive two copies of the application form.  Sign both and mail them in the supplied envelopes.  Mail one copy of the application and your $200.00 certified funds using the supplied envelope addressed to the Nevada Foreclosure Mediation Program Office.  If you do not receive any application forms or envelopes, contact the Foreclosure Mediation Program

Currently, the Foreclosure Mediation Program has 95 mediators who have been appointed by the Supreme Court.  Those mediators have all been through rigorous training designed to teach the mediators the intricacies of the mortgage loan and foreclosure process and some mediation techniques.  Another 80 mediators have been trained recently and the Supreme Court will select from the list of those who successfully completed the training.

Justice Hardesty provided the following statistics regarding the program:

  • Notices of Default filed:                 29,242 (July through October)
  • Requests for mediation:                3,446
  • Mediations conducted:                  372
  • Mediations scheduled:                   805
  • Cases processed and
    ready for mediations
    to be scheduled                               1,402

(All statistics beginning July 1, 2009, and as of November 16, 2009 unless noted)

Carlos L. McDade, Esq.

Mediator

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Distinct Nevada Laws Concerning Deeds of Trust & Foreclosure

On August 14, 2009, in Mortgage, Real Estate, by blacklobellolaw

Nevada requires that a deed of trust be used to secure a real estate loan.  Although commonly referred to as a mortgage, a deed of trust has significant differences from a mortgage.  In addition, states using deeds of trust differ among themselves in their requirements.  

All mortgages are two-party instruments between the lender and the borrower.  Foreclosure of a mortgage requires the lender to file a complaint with the appropriate court and proceed through the judicial process. Anecdotal reports from mortgage states such as Ohio indicate that borrowers can delay these cases for years. The process is slow and expensive.

Deeds of trust are three-party instruments.  There is a beneficiary, who is the lender; a trustee who is a third party responsible for the foreclosure process including filing the Notice of Default and related documents; and the trustor who is the borrower.  A foreclosure of a deed of trust does not require that a court case be filed.  It is fast and inexpensive compared to a mortgage foreclosure. 

In Nevada the foreclosure process begins with the filing of a notice of default by the trustee.  The borrower has 35 days from that date to bring the delinquent payments current together with the lender’s costs and fees.  Starting on the 36th day, to prevent foreclosure the borrower must pay the entire principal balance owing together with interest and any additional amounts owing for fees and costs. 21 days prior to the trustee’s foreclosure sale the trustee must publish a notice of the sale once each week and also post the notice.   At the end of 111 days the property may be sold at the trustee’s sale.  The borrower has no right of redemption after the sale.

Nevada is a full recourse state until October 1, 2009.  This means that the foreclosing lender has six months to file a complaint against the borrower seeking the recovery of the deficiency after the sale.  After the six month period lapses the lender is barred from filing suit to recover the deficiency.  Full recourse means that the borrower is liable for the deficiency regardless of the purpose of the loan.  There is no exemption for loans used to purchase an owner occupied residence.

Effective October 1, 2009, Nevada becomes a limited recourse state similar to California.  Loans made after October 1, 2009; by a financial institution to a borrower who continuously occupies the property as a primary residence are nonrecourse.  This means that the lender may not pursue a foreclosed borrower to recover a deficiency. 

Nevada recently joined the small number of states that entitle the borrower receiving a notice of default to request mandatory mediation with the lender.  This applies to all primary residences receiving a notice of default starting July 1, 2009.

Tisha Black Chernine, Esq.

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Final Nevada Mandatory Foreclosure Rules Adopted

On July 22, 2009, in Mortgage, Real Estate, by blacklobellolaw

The Nevada Supreme Court has adopted final rules for the new mandatory foreclosure mediation.  These new rules become effective July 31, 2009. The rules include a number of significant changes, as the result of several public hearings conducted by the court.

The mandatory mediation program allows a homeowner receiving a Notice of Default on or after July 1, 2009, to request a mandatory mediation with the lender with the objective of obtaining a loan modification, or to estimate a short sale value the lender may consider.

One of the key questions has been exactly what documents the lender must provide.  The answer is that the lender must provide an original or a certified copy of the following:

       1.    Deed of Trust, and each of its assignments; and

      2.    Mortgage Note, and each of it assignments

A certified copy must be made under oath before a notary public and include a statement that the person certifying the copy is in actual possession of the original of each certified document.

In the event of a lost or destroyed document, the requirements of Nevada law shall apply as detailed in the Nevada Revised Statues. Should this event occur, hours of additional work would be created for all the parties involved.

The lender must provide under confidential cover to the mediator the “evaluative methodology” used in deciding whether a homeowner is eligible for a loan modification.  This will be helpful to the mediator in assisting both parties arrive at a resolution.

The lender must also provide the most current appraisal of the property and shall prepare an estimate of the short sale value that it may be willing to consider. Because “most current” may be practically meaningless in today’s market the burden in effect may be upon the homeowner to provide a truly current appraisal, meaning one made within the last six months.

Until there is a record of accomplishment for the mediation program, we will have no way to predict the effectiveness of this program. The Supreme Court has promulgated rules that give all parties an opportunity to effectively and persuasively present their case.

Carlos L. McDade, Esq.

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The Foreclosure Process In Nevada

On June 24, 2009, in Real Estate, by blacklobellolaw

What is the foreclosure process in Nevada?  The answer can help a homeowner decide what course of action to take in this stressful situation.

A foreclosing lender in Nevada is entitled to a nonjudicial foreclosure of its Deed of  Trust.  The Deed of Trust secures the payment of the promissory note given by the homeowner to the lender at the time the loan is made.

A nonjudicial foreclosure means that the lender need not file a court case to pursue the foreclosure.  Nevada lenders are entitled to a Trustee’s sale of the property once the mandatory foreclosure time period has passed. 

The foreclosure process takes a minimum of 111 days. The process begins with the filing and service of the Notice of Default (NOD).  The NOD is filed with the county real property records. 

The NOD starts the 35-day reinstatement period.  During this period the homeowner may reinstate the loan by paying all delinquent payments, Trustee fees, and other expenses. 

Starting on the 36th day after the NOD the homeowner can avoid the Trustee’s sale only by paying the entire loan amount together with the associated fees and expenses.  

During the final 21 days of the 111 day foreclosure period the Trustee  must publish a notice of sale once each week for three successive weeks. 

The actual sale site may be the Trustee’s office or other location.  The lender will bid in the amount of its debt.  This is generally the winning bid.  The lender takes title to the property after the sale. 

It is important to note that after the sale the homeowner has no right of redemption for the property.

Watch for future posts about the lender’s right to a deficiency judgment against the homeowner and other foreclosure topics.

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Nevada Assembly Bill 149

On June 3, 2009, in Real Estate, by blacklobellolaw

On June 1, 2009 Assembly Bill 149 was enacted which amends existing laws related to foreclosures and sets forth new procedures related to defaults and the exercise of powers pursuant to a trust agreement or deed of trust.

 A trustee under a deed of trust has the power to sell the property to which the deed of trust applies, subject to certain new restrictions.  (NRS 107.080, 107.085)  Pursuant to the new amendments, additional restrictions were added to the trustee’s power of sale with respect to owner-occupied housing. The trustee must provide the grantor of a deed of trust or the person who holds the title of record with the right to request mediation under which such owner of record or the grantor may receive a loan modification.  The grantor or owner of record has thirty (30) days from the receipt of notice to request the mediation. It is the obligation of the grantor or owner of record to request the mediation to request the mediation through the Administrative Office of the Court.

Once mediation is requested, no further action may be taken to exercise the power of sale until the completion of the mediation.  Each mediation must be conducted by a senior justice, judge, hearing master or other designee pursuant to rules adopted by the Nevada Supreme Court. A mediation fee of not more than $85 per hour (not to exceed $400)  may be charged and collected for the mediation.  The mediation fee is to be borne equally by the mediating parties. The Supreme Court of Nevada shall draft and publish the rules related mediation rules and address other concerns that have yet to be clarified.

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