To buy a home most people borrow money from a bank or another lender. In exchange for the loan, the lender holds a lien against the property. If the borrower misses payments, then the loan goes into default and the lender can sell the property to pay off the loan. This process is called mortgage foreclosure.
- Does my lender have to go to court to initiate a foreclosure?
- How do I know if my lender has begun foreclosure proceedings against me?
- How soon can my lender record the Notice of Default?
- What is mediation?
- How do I know if I am eligible to participate in mediation and how do I request it?
- Am I the only one that pays for mediation?
- What additional documents or information do I need for mediation?
- How long before a mediator is assigned to my case?
- What forms and documents is the lender required to provide at mediation?
- What happens if the lender does not bring the required documents to mediation?
- What if I don't want to participate in mediation?
- What happens if I am not satisfied with the outcome of mediation?
- Are there any additional benefits if I am an active duty service member?
- When can the bank sell my home?
No. The majority of foreclosures in Nevada are trust deed foreclosures. A trust deed foreclosure is non-judicial, meaning your bank, lender, or mortgage servicer does not need to go to court to foreclose and sell your home. If you have missed a mortgage payment, the lender or servicer begins the foreclosure process by mailing and recording a Notice of Default or Breach and Election to Sell. This is notice to you that the legal foreclosure process has begun and you will have about 4 months to cure the arrearage or work something out with your lender to save your home from a foreclosure sale.
A Notice of Default will be recorded against your property and sent via registered or certified mail with a return receipt to the homeowner and each guarantor or surety to the mortgage. The Notice of Default must describe the deficiency and include (1) contact information for a person with the authority to negotiate a loan modification, (2) contact information of at least one HUD approved housing counseling agency the homeowner can contact for assistance, and (3) contact information for the Foreclosure Mediation Program. The Notice of Default must also be posted on the property within 3 days of recording. This rule applies to all single family residences or small complexes that have 4 or less units (one of which the homeowner must live in).
How soon can my lender record the Notice of Default and Election to Sell?
Your lender must wait at least 30 days after you miss your first mortgage payment before it must send you a letter telling the homeowner of the lender's right to foreclose and offering a list of foreclosure alternatives. If the homeowner does not resolve the delinquency within the next 90 days, the bank can record a Notice of Default. Additionally, under new guidance from the Consumer Financial Protection Bureau, the Notice of Default can be recorded no earlier than 120 days after the homeowner defaults.
Mediation is an opportunity for homeowners and lenders to meet and discuss alternatives to foreclosure. Mediation is mandatory for your lender if you complete the Enrollment in Mediation form and submit a non-refundable $200 fee to the State of Nevada Foreclosure Mediation Program. Your lender is required to mail you the Enrollment in Mediation form when the Notice of Default is mailed to you. You and your lender will sit down with a mediator to discuss ways to avoid or lessen the hardship of foreclosure. The mediation requires good faith on the part of both you and your lender. This means you cannot request mediation to simply delay the foreclosure sale.
Mediation applies to residential properties located in Nevada that are owner-occupied and the primary residence of the owners. Your lender will include the mediation request forms with your Notice of Default. You will also receive two pre-addressed envelopes to send a copy of the mediation request and financial forms to both the Foreclosure Mediation Program and the foreclosure trustee (the agency that recorded the Notice of Default). You must elect mediation within 30 days by sending notice to the mediator and your lender otherwise you will have been deemed to have waived (given up) mediation. You must also send $200 to the Foreclosure Program Administrator if you wish to request mediation.
No. Your lender must also pay for mediation. The total cost of mediation is $400 and goes to the mediator. This cost is shared 50/50 between the homeowner and the lender. This is why you only send $200 to the Foreclosure Program Administrator.
After submitting the mediation forms and $200, the mediator will contact both parties to schedule a document exchange. Both the homeowner and the lender are required to exchange various documents throughout the mediation process. The additional documents can be found on the Nevada Supreme Court's website. Most of the information the homeowner will submit to the lender will include documentation the lender requires to evaluate a homeowner for a loan modification. Generally, homeowners will be evaluated for eligibility under the Making Home Affordable program (HAMP) as a starting point. For further information regarding the Making Home Affordable program, please click here.
In order to have the best possible chance to work something out at mediation, you should have (1) a steady income or the prospects of a steady income in the near future; or (2) you are willing to give up your home (short sale) and want more time and/or money to move (cash for keys). Good faith also requires your lender to accept a reasonable offer.
The Foreclosure Mediation Program will assign a mediator 10 days after receiving the Election form from both the homeowner and the foreclosure trustee. The mediation must then take place within 45 days of the mediator’s assignment. The mediation process should not take longer than 135 days, from the day the Mediation Program receives both your Election of Mediation form and the form from the foreclosure trustee.
The foreclosure trustee, lender, servicer, or other representative (whoever shows up for the bank at the mediation) must also submit certain documents. The representative must submit an appraisal no more than 60 days old, an estimate of short sale value, a non-binding proposal to resolve the foreclosure, and the original or a certified copy of the Deed of Trust, each assignment of the Deed of Trust, the Note, and each endorsement of the Note. If the original documents are lost or destroyed, the mediator can accept a court order to enforce a lost, destroyed, or stolen instrument. These documents must be submitted to the mediator and exchanged between parties at least 10 days before the mediation.
What happens if the lender does not bring the required documents to mediation?
If the bank or its representative does not turn over an original or certified copy of the Note, Deed of Trust, each assignment of the Deed of Trust, and each endorsement of the Note, the penalty is sanctions, which can include unilateral modification of the loan. At the very least, the mediator will not certify mediation as complete so the Foreclosure Mediation Program will not issue the certificate that allows the bank to proceed with the foreclosure. The parties must then file a petition in court to proceed with the foreclosure or seek sanctions. The petition seeking judicial review of the mediation must be filed within 30 days after you receive the Mediator's Statement from the mediation. If the lender does not bring all required documents to mediation and does not file a petition for judicial review, it must rescind its Notice of Default and restart the process by recording a new Notice of Default. Typically, restarting the process can take the bank 6 months to a year. Once a new Notice of Default is recorded, the homeowner has the opportunity to enroll in mediation once again.
What if I don’t want to participate in mediation?
If you do not wish to request mediation and instead elect to waive mediation, the foreclosure trustee (company proceeding with the forced sale of your home) can apply for a certificate that no mediation is required from the Foreclosure Medication Program Administrator by filling out and submitting their Trustee’s Affidavit. Once the certificate that no mediation is required is received from the Foreclosure Mediation Program, the foreclosure trustee must record the certificate and send it to the homeowner. If the homeowner does not respond to the notice advising of the right to request mediation within the 30 days to do so, the foreclosure trustee can seek the certificate that no mediation is required to proceed with the foreclosure sale.
Once the certificate that no mediation is required is recorded and sent to the homeowner, the foreclosure trustee can continue with the foreclosure pursuant to NRS 107.080. This means that the trustee can issue the Notice of Sale 3 months after recording the Notice of Default.
If either party is not satisfied with the outcome, a Petition for Judicial Review can be filed. This must be done within 30 days of the receipt of the mediator’s statement. These petitions must be filed with the District Court in the county where the notice of default was recorded.
The Service Members Civil Relief Act of 2003 (formerly the Soldiers’ and Sailors’ Civil Relief Act of 1940) provides additional benefits to service members on active duty.
A court order is required before a home is sold at a foreclosure sale while a service member is on activity duty or within 90 days after the end of active duty. This law applies even in non-judicial foreclosure states like Nevada. Therefore, a lender cannot foreclosure on a home through the trust deed foreclosure process. Instead, the foreclosing party must file a foreclosure action in court.
If the home is sold at a foreclosure sale without a court order, the sale may be rendered invalid and could subject the lender to criminal prosecution.
The court can also stay foreclosure proceedings while the service member is on activity duty. The military service must materially affect the service member’s ability to pay, though, in order to obtain the stay of the foreclosure proceedings. A foreclosure obtained by default during active duty or within 60 days after the end of active duty may be reopened or set aside by the court.
Active duty service members can also request a reduction in the interest rate on any debt incurred prior to active duty. The interest rate must be reduced to 6% while the service member is on active duty. The service member must request the interest rate reduction from the lender and provide proof of the return to active duty in order to qualify. If the ability to pay on the debt, though, is not materially affected by the military service, a court can decide to raise the interest rate above 6%.
The Notice of Sale may be issued to the homeowner 3 months after the Notice of Default is recorded and the Foreclosure Mediation Program has issued the certificate that mediation is complete. The Foreclosure Mediation Program certificate must be recorded and should be done before the date the Notice of Sale is recorded. Prior to issuing the Notice of Sale, the foreclosure trustee must issue the homeowner a danger notice. The danger notice must be sent to the homeowner at least 60 days before the sale and notify the homeowner of a legal services organization or a HUD approved housing counseling agency the homeowner might contact for assistance, among other potentially helpful contact information.
The foreclosure trustee must record the Notice of Sale and give notice of the time and place of the sale by (1) personally serving or mailing the notice by registered or certified mail to the homeowner and all others entitled to notice (which includes any surety on the mortgage or the subordinate lien holder); (2) posting the notice in a public place where the property is located for 20 successive days; (3) publishing a copy of the notice 3 times (once a week for 3 weeks); AND (4) posting a notice on the property at least 15 days before the sale date. This generally means that the sale date cannot be sooner than 3 weeks after the recording of the Notice of Sale.
The homeowner still has up to 5 days before the actual date of sale to cure the default and reinstate the mortgage. If nothing is done to stop the foreclosure prior to the sale, the home can be sold at auction on the date and time listed on the Notice of Sale.
What happens at a foreclosure sale?
At the foreclosure sale, the lender (or some one else) purchases the property (gaining title). Afterward the lender or other new owner may serve you with a 3 day notice to quit. If you remain after 3 days, the lender may serve you with a summons and complaint asking a court to evict you. This court action is called an unlawful detainer action. The new purchaser may not enter your home or change the locks until after serving a summons and complaint for unlawful detainer and completing the lawsuit. For more information about evictions during or after a foreclosure, please see our Foreclosure Evictions page for more information.
NOTE: The information contained on these pages is for general background information only. If you have a legal question, it is best to consult with an attorney.