Why Is It Impportant For Nevada Homeowners to Protect their Homes?
In Nevada, homeowners must be aware of mortgage loans and foreclosure laws inorder to be few steps aheads of unscrupulous elements that would do whatever it takes to snatch away your home right under your nose.
Why You Need to Know About Nevada Mortgage Loans
When you take out a loan to purchase residential property in Nevada, you typically sign a promissory note and a deed of trust. A promissory note is basically an IOU that contains the promise to repay the loan, as well as the terms for repayment. The deed of trust provides security for the loan that is evidenced by a promissory note.
How Can you Handle the Issues of Missed Payments
If you miss a payment, most loans include a grace period of ten or fifteen days after which time the loan servicer will assess a late fee. (Loan servicers collect and process payments from homeowners, as well as handle loss mitigation applications and foreclosures for defaulted loans.)
The late fee is generally 5% of the overdue payment of principal and interest based on the terms of the note. To find out the late charge amount and grace period for your loan, look at the promissory note that you signed. This information can also be found on your monthly mortgage statement.
What Are Your Option About Missing Quite a Few Payments
If you miss a few mortgage payments, your mortgage servicer will probably send a letter or two reminding you to get caught up, as well as call you to try to collect the payments. Don’t ignore the phone calls and letters. This is a good opportunity to discuss loss mitigation options and attempt to work out an agreement (such as a loan modification, forbearance, or payment plan) so you can avoid foreclosure.
How Can You Handle Pre-Foreclosure Loss Mitigation Review Period
Under the federal Consumer Financial Protection Bureau servicing rules that went into effect January 10, 2014, the mortgage servicer must wait until you are 120 days delinquent on payments before making the first official notice or filing for any nonjudicial or judicial foreclosure. This is to give you sufficient time to explore loss mitigation opportunities. (If a servicer’s sole purpose of providing a notice is to inform you that you are late on your payments and/or explain what your loss mitigation options are, the servicer can deliver the notice within this pre-foreclosure period.)
What About Deed of Trust, What You Need to Know
Nevada deeds of trust often contain a clause that requires the lender to send a notice, commonly called a breach letter or demand letter, informing you that your loan is in default before it can accelerate the loan and proceed with foreclosure. (The acceleration clause in the mortgage permits the lender to demand that the entire balance of the loan be repaid if the borrower defaults on the loan.)
The letter must specify:
- the default
- the action required to cure the default
- a date (usually not less than 30 days from the date the notice is given to the borrower) by which the default must be cured, and
- that failure to cure the default on or before the date specified in the notice may result in acceleration of the debt and sale of the property.
What Types of Foreclosure Procedures Is there In Nevada
In Nevada, most residential foreclosures are nonjudicial. This means the lender can foreclose without going to court as long as the deed of trust contains a power of sale clause.
What is Notice of Default and Election to Sell
In Nevada, Non-judicial proceedings is used to foreclose most home. The Nevada nonjudicial foreclosure process formally begins when the trustee, a third-party, records a Notice of Default and Election to Sell (NOD) in the office of the recorder in the county where the property is located, providing three months to cure the default.
A copy of the NOD must be sent to each person who has a recorded request for a copy and each person with an interest or claimed interest in the property by registered or certified mail within ten days after the NOD is recorded recordation.
What Are the Requirements for Posting NOD?
If a residential foreclosure, a copy of the NOD must be posted in a conspicuous place on the property 100 days before the date of sale.
Are there Any Affidavit Required
The trustee or beneficiary (lender) must record a notarized affidavit along with the NOD that states, based on a review of business records, including all of the following information.
- The full name and business address of the current trustee or the current trustee’s personal representative or assignee, the current holder of the note secured by the deed of trust, the current beneficiary of record and the current servicer of the obligation or debt secured by the deed of trust.
- That the beneficiary under the deed of trust, the successor in interest of the beneficiary or the trustee is in actual or constructive possession of the note secured by the deed of trust; or that the beneficiary or its successor in interest or the trustee is entitled to enforce the obligation or debt secured by the deed of trust.
- That the beneficiary or its successor in interest, the servicer of the obligation or debt secured by the deed of trust or the trustee, or an attorney representing any of those persons, has sent to the borrower a written statement including the amount needed to cure the default, the principal amount of the debt, the accrued interest and late charges, a good faith estimate of all fees, contact information for obtaining the most current amounts due, and each assignee of the deed of trust.
What Other Alternatives Do I Have to Stop the Foreclosure?
You have 3 alternatives, sometimes 4.
Your alternatives are:
1). Try to call your alleged lender to see if you can get a reasonable person on the phone. Don’t panic, just be prepared as over 90% of the people you speak to on the phone are programmed to act certain way.i.e, if you are lucky as 99.9% you’ll get a recording and will have to leave a message, unfortunately, you have less that 20% of getting a call back response. You’ll know very early that the alleged lender, definitely not with your best interest at heart.
2). Nevada law requires that borrowers who are in foreclosure be given the option to participate in mediation if the property is owner-occupied.
The trustee must mail to the borrower (by registered or certified mail, return receipt requested) an Election to Mediate Form no later than ten days after recording the NOD. If the borrower wants to elect mediation, the form must be completed and returned within 30 days.
3). You can commence litigation to immediately stop the foreclosure, but you have to be prepared to whether the stop as you’ll experience various emotions during the litigation proceedings, but with time, you’ll get used to it.
3) Bamkruptcy is another method to stop foreclosure, but it will not be in your best interest if you just found yourself in foreclosure situation. We recommend Bankruptcy as the last resort and this is why?
If you are a homeowner with a mortgage payment, say like $1000/mth. If you have missed payment that is 1 year or more. Your Chapter 13 bankrupcty payments will be difficult for you to make once in bankrupcty because you will still make the Normal monthly payment and then some portion of the missed payments, which is sometimes, nealy half of the monthly payment. So if you make a payment of $1000 before the foreclosure began, you’ll now have to make ($1500 (Regular + Potion Payments) to catch up. So you ask yourself, if you can’t afford the original payment of $1000, before you went into foreclosure, how can you afford the higher payments.
In Nevada, You Have What is called Danger Notice
At least 60 days prior to the date of the sale, the trustee must provide the borrower(s) with a separate “Danger Notice” stating that they are in danger of losing their home to foreclosure, along with a copy of the original promissory note.
The notice must be:
- personally served to the borrower
- left with a person of suitable age and discretion (if the borrower is not available) and a copy mailed, or
- if a person of suitable age and discretion is not available, then the notice may be posted in a conspicuous place on the property, left with a person residing in the property, and then mailed to the borrower.
What do you need to know about Notice of Sale
After expiration of the three-month period following the recording of the NOD, the trustee must give notice of the time and place of the sale by recording the notice of sale and by:
- Providing the notice of sale to each required party by personal service or by mailing the notice by registered or certified mail to the last known address 20 days before sale.
- Posting the notice of sale on the property 15 days before the sale.
- Posting the notice of sale for 20 days successively in a public place in the county where the property is situated and on the property 15 days before sale.
- Publishing a copy of the notice of sale three times, once each week for three consecutive weeks, in a newspaper of general circulation in the county where the property is situated.
Notice to Tenants
If the property is tenant occupied, a separate notice must be posted in a conspicuous place on the property and mailed to the tenant no later than three business days after the notice of sale is given.
Reinstatement Before Sale
In the case of owner-occupied housing, the borrower gets a right to reinstate by paying the arrearage, costs, and fees. This right expires 5 days prior to the date of the foreclosure sale.
The Foreclosure Sale
The foreclosure sale must be between the hours of 9:00 a.m. and 5:00 p.m. All sales of real property must be made:
- at the courthouse in the county in which the property or some part thereof is situated (in counties with a population of less than 100,000), or
- at the public location in the county designated by the governing body of the county for that purpose (in counties with a population of 100,000 or more).
The property will be:
- sold to the highest third-party bidder or
- revert to the foreclosing lender and become REO
Deficiency Judgment Following Sale
When a lender forecloses on a mortgage, the total debt owed by the borrower to the lender frequently exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a “deficiency.” In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount from the borrower.
In Nevada, a lender may obtain a deficiency judgment following foreclosure, but the amount of the judgment is limited to the lesser of:
- the difference between the total debt and fair market value of the home, or
- the difference between the total debt and foreclosure sale price.
For loans taken out after October 1, 2009, deficiencies are prohibited for purchase money loans (that have not been refinanced) held by a bank or other financial institution for single-family residences occupied continuously by the borrowers.
A redemption period is the legal right of any mortgage borrower in foreclosure to pay off the total debt, including the principal balance, plus certain additional costs and interest, in order to reclaim the property. In Nevada, there is no redemption period following a nonjudicial foreclosure sale.
Eviction Following Foreclosure
If you don’t vacate the property following the foreclosure sale, the new owner will likely:
- offer you a cash-for-keys deal (where the new owner offers you money in exchange for you agreeing to move out), or
- give you a three-day notice to quit (leave) before filing an eviction lawsuit.
To learn more about foreclosure in general, ways to defend against foreclosure, and programs to help struggling homeowners avoid foreclosure
When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;
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