Foreclosure And Foreclosure Mediation
FYI! If you have questions about evictions related to foreclosure – maybe because you are a tenant renting a foreclosed home, or maybe because you are a former homeowner who has lost a home to foreclosure and are being evicted – click to visit our Eviction Issues Related to Foreclosure page. There you can find information about tenant's rights and landlord's obligations in foreclosure and about the eviction process for both tenants and former homeowners.
To learn about the foreclosure process in Nevada, foreclosure scams to beware of, government programs available to homeowners, and other issues relating to foreclosure, click to visit the Legal Aid Center of Southern Nevada website.
If you have received a Notice of Default and have elected Foreclosure Mediation or are about to receive a Notice of Default and want to know your options, there are a variety of resources that are available to you at no cost.
Legal Aid Center Of Southern Nevada
For homeowners who meet certain income guidelines and need legal representation, Legal Aid Center of Southern Nevada staff attorneys or pro bono attorneys may be able to represent you. You must attend one of the free Legal Education Classes first to apply for services (see below). Information on the application process is available after each class. Click to visit the Legal Aid Center of Southern Nevada website to learn more about programs and services.
Free Legal Education Classes
Legal Aid Center of Southern Nevada offers free legal education classes on foreclosure where you can learn about the foreclosure process, the Foreclosure Mediation Program, and alternatives to foreclosure, such as short sales and loan modifications. Click to visit the Legal Aid Center of Southern Nevada website for class schedules and additional information.
Free Ask-A-Lawyer Program
For homeowners who have more detailed questions about foreclosures and who want to talk to an attorney and obtain legal advice about their case, there are attorneys available at the Civil Law Self Help Center on the second and fourth Tuesday of the month. Starting at 8:00 a.m., you can sign up for a free 30-minute one-on-one session with a volunteer attorney. Sessions begin at 9:00 a.m., and the number of slots is limited. Click to visit our About the Self-Help Center page for location information.
Click to see the Supreme Court's information on the Foreclosure Mediation Program.
Q&A - Mortgage Foreclosure and Mediation
What is a mortgage foreclosure?
To buy a home, most people borrow money from a bank or some other lender. In exchange for the loan, the lender holds a lien against the property. If the borrower misses payments, the loan goes into default, and the lender can sell the property to pay off the loan. This process is sometimes called "mortgage foreclosure."
CAUTION! Your mortgage lender is not the only entity that might be able to foreclose on your home. Under Nevada law, your homeowners' association can foreclose on your home for unpaid HOA dues. (NRS 116.31162.) So do not ignore any notice you receive and seek out help as soon as possible! Click to visit Community Resources for links to various organizations that might be able to provide you with assistance.
How does mortgage foreclosure work?
Most Nevada lenders use a "non-judicial foreclosure" process (sometimes called "sale under a deed of trust") under Chapter 107 of the Nevada Revised Statutes. "Non-judicial" means that your lender does not have to go to court to foreclose on your mortgage. Your lender simply has to follow the steps outlined in the statute.
Under the terms of the deed of trust which you sign when you get a home loan, a trustee (generally a title company) holds a "power of sale" in the event that you default. When you fail to make your mortgage payments as agreed, you are said to be "in default." Even if you miss one payment you are in default. If you miss a payment deadline, you are in default, but generally you can cure the default by making the payment and paying the late fees. Once you go into default, the bank can foreclose and potentially sell your home.
Prior to the sale of your home, the trustee must first:
- Wait until you are in default.
- Deliver a Notice of Default and Election to Sell to you by registered or certified mail, post a copy on the property, and record the notice with the Clark County Recorder. (NRS 107.080, 107.087.)
- Send you a form that allows you to elect mediation if you choose to do so. (NRS 107.085.) The Election/Waiver of Mediation Form will be included with the Notice of Default and Election to Sell that you receive.
- Wait for at least three months after the date the Notice of Default and Election to Sell was recorded. (NRS 107.080(2)(d).)
- At the end of the three-month period – if you have not "cured" (fixed) the default by paying all amounts due at least five days before the sale (NRS 107.080(2)(b)) – send you a Notice of Trustee's Sale by registered or certified mail, stating the date, time, and place of the sale (for example, "On Wednesday, February 5, 2009 at 10:00 a.m. on the courthouse steps"), and record the notice with the Clark County Recorder. (NRS 107.080(4), 107.087.)
- Post the Notice of Trustee's Sale in three public places for twenty consecutive days and run the notice in the newspaper (generally a legal newspaper) for three consecutive weeks. (NRS 107.080(4).) (Because of these requirements, the sale date is usually at least three weeks after the notice of sale.)
TIP! The Notice of Default and Election to Sell and the Notice of Trustee's Sale are official filings that you can view at the county recorder's office, along with any other documents that have been recorded against your property. Click to visit the Clark County Recorder website.
Once you receive the Notice of Default and Election to Sell, the sale will happen in approximately 111 days (three months plus three weeks). The foreclosure is actually done by the trustee rather than the bank that holds the mortgage. So notices do not come from the bank but from a third party whom you may not recognize.
Although not as common, a lender could also file a foreclosure action with the court (sometimes called a "judicial foreclosure") rather than use the "non-judicial foreclosure" process. A court case for judicial foreclosure is like any other court case in many ways. In the case, the lender can ask the court to force the sale of the property and enter a money judgment against you for whatever amount is still owed on your loan after the sale. If your lender is using the judicial foreclosure process, a process server will serve you with a summons and complaint, to which you can then respond.
How does the lender or other new owner take my home from me?
At the foreclosure sale, the lender (or someone else) purchases your home and gets the title. Afterward, the lender or other new owner can serve you with a three-day notice to leave. (NRS 40.255.) If you stay on the property after three days, the lender/owner can serve you with a summons and complaint asking the court to evict you. Click to visit Evicting a Former-Owner After Forclosure for more information.
What can I do if I am facing foreclosure?
Do not wait! If the process has gone too far, it may be too late to stop foreclosure of your home.
- Call your lender and ask for assistance. Most lenders have programs to work with homeowners to modify loans. Start early because it may take several weeks to process a request.
- If you do receive a notice of default, you can request mandatory mediation (see below) which will require your lender to sit down with you and discuss modification options.
- If you are having difficulty with your lender or want more information about your options and programs that might be available, contact the "Home Again" program at 1-855-HLP4NEV (1-855-457-4638). The Home Again program is a free one-stop resource for Nevada homeowners. Click to visit the Home Again[http://www.homeagainnevada.gov/] website.
Should I hire a lawyer or a "save your home" service?
Maybe, but first be beware of scammers! The notice of default is a public record, and anyone can access the information. It is best to be skeptical about offers to help you refinance or modify your loan. Many of them are fraudulent.
Generally, you do not need to pay anyone to seek a loan modification for you. You can try to renegotiate with the lender yourself or contact organizations that do this for free. You can also try to refinance with a different lender.
To learn what resources might be available to you, contact the "Home Again" program at 1-855-HLP4NEV (1-855-457-4638) or click to visit the Home Again website.
TIP! For short, practical tips and links on topics such as mortgage payments, foreclosure rescue scams, reverse mortgages, and mortgage servicing, click to visit the Money Matters website maintained by the Federal Trade Commission and click on "Your Home."
Who can I talk to about renegotiating my mortgage?
Under Nevada law, when the trustee mails you the Notice of Default and Election to Sell, the trustee must include with the notice the contact information for a person with authority to negotiate a loan modification, along with contact information for at least one local housing counseling agency approved by HUD. (NRS 107.086.) The trustee must also post a notice on the property that provides the contact information of the trustee or the person conducting the foreclosure authorized to provide information relating to the property’s foreclosure status. (NRS 107.087.)
To be referred to a housing counselor or other community organization that might be able to assist you, contact the "Home Again" program at 1-855-HLP4NEV (1-855-457-4638) or click to visit the Home Again website.
Do I qualify for the federal Making Home More Affordable program?
You may qualify for either refinancing or a loan modification under the federal Making Home More Affordable program. For more information about the program, click to visit the Making Home More Affordable website.
You can find out more about this and other programs that might be available to you by contacting the "Home Again" program at 1-855-HLP4NEV (1-855-457-4638) or clicking to visit the Home Again website.
Do I qualify for foreclosure mediation?
The Notice of Default and Election to Sell must give you the option of "foreclosure mediation." Any homeowner can select mediation after the lender has sent the notice of default if:
- The property is owner-occupied (in other words, it is your primary residence – not a second home, vacation home, investment property, or vacant land);
- Not later than thirty days after the notice of default is mailed, you complete the Election/Waiver of Mediation Form and mail the original to the mediation program administrator by certified mail, along with a $200 fee, and mail a copy to the trustee by certified mail;
- You do not have a current open bankruptcy (although exceptions may apply); and
- You have not previously surrendered the property.
How does foreclosure mediation work?
A mediator is a neutral third party who helps you and your lender try to reach a voluntary negotiated agreement. The lender may not foreclose until mediation has been completed. Mediation is fast (less than four hours), inexpensive ($400, shared equally by the parties), and more flexible than more formal processes. The goal of the program is to make foreclosure a remedy of last resort.
To elect mediation, you must complete the Election/Waiver of Mediation Form and mail the original, by certified mail, to the mediation program administrator, along with your $200 payment. You must also mail, by certified mail, a copy of the election form to the trustee. Once you elect mediation, no further action can be taken to sell your home until completion of the mediation. (NRS 107.086.)
Between two and four weeks after you send in your election form, you will receive a notice appointing a mediator. The mediator will arrange a time and place for the mediation. The mediator will send you a scheduling notice explaining what documents you must produce and how to exchange them with your lender before the mediation.
Three parties will be present at the mediation: You, the lender, and the mediator. Both you and the lender must negotiate in good faith regarding alternatives to foreclosure. You will tell them what you want and show them what you can afford. If you reach an agreement, the mediator will help you outline the terms of the agreement.
If you do not reach an agreement, the mediator will issue a recommendation to the mediation program administrator. If the lender did everything it was required to do, the program administrator will issue a certificate allowing the foreclosure to proceed. If the lender failed to bring all the documents or otherwise participate in good faith, the mediator may make a finding that will prevent the certificate from issuing, meaning your lender will not be able to foreclose.
Either party can petition the court for judicial review of the mediator's decision. You can ask the court to find bad faith participation by the lender and seek sanctions. For forms and information about the judicial review, click to visit Judicial Review of Foreclosure Mediation.
What are the steps in the foreclosure mediation process?
- Step 1: The lender records a Notice of Default and Election to Sell at the county recorder's office.
- Step 2: The Notice of Default and Election to Sell is mailed to the homeowner. Mailed along with the notice of default is a copy of the Election/Waiver of Mediation Form.
- Step 3: No later than thirty days after mailing of the notice of default, the homeowner must send, by certified mail, the completed Election/Waiver of Mediation Form and $200 to the trustee. Also, the homeowner must mail a copy of the completed election form to the mediation program administrator. If the homeowner fails to send the form within thirty days, the administrator will issue a certificate that no mediation is required.
- Step 4: The mediator will set a date and time for the mediation. The mediation must conclude within 135 days following receipt by the administrator of the mediation fees and required documents provided on behalf of the lender. If after thirty days of submitting the election form the homeowner does not hear from a mediator, the homeowner should call the mediation program administrator.
- Step 5: At least ten days prior to the mediation, the homeowner must prepare and exchange with the lender (1) a financial statement and (2) a housing affordability worksheet. The lender must prepare and exchange with the homeowner (1) the most current and appropriate appraisals and (2) an estimate of the short sale value of the property.
- Step 6: The mediation is conducted. At the mediation, both the homeowner and the lender shall submit to the mediator a confidential nonbinding proposal for resolving the foreclosure. The lender must also provide the mediator the evaluative methodology used in determining the eligibility of the homeowner for a loan modification. Lenders shall also bring the following to the mediation: (1) the original or certified copy of the deed of trust, (2) the original or certified copy of the mortgage note, and (3) the original or certified copy of each assignment of the deed of trust and mortgage note.
- Step 7: The parties either come to an agreement (for example, for a loan modification) or the parties do not come to an agreement (in which case, the foreclosure process will likely proceed).
How can I obtain more information about foreclosure mediation?
The Nevada Supreme Court has adopted rules and model forms governing the Nevada Foreclosure Mediation Program, all of which are available online. Click to visit the Nevada Foreclosure Mediation website.
To learn how to effectively represent yourself, you can sign up for a free Foreclosure class. Click to visit Free Classes for more information.