Nevada Foreclosure Laws Has Virtually Stopped All Foreclosure?

The new laws in Nevada just got passed only last month and it has miraculous effect already on our rapid foreclosure. New default notices were way down last month in Las Vegas (116 or so) and foreclosure filings in Nevada plunged in October during the first month of a new state law. Only more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by ForeclosureRadar.com, a real-estate website that tracks such filings.

As you may know, Nevada’s state Assembly passed a measure that took effect on Oct. 1, 2011 designed to crack down on “robo-signing,” where bank employees signed off on huge numbers of legal filings while falsely claiming to have personally reviewed each case. This new law makes it a felony—and threatens to hold people criminally liable—for making false representations concerning real estate title. There are civil penalties of $5,000 for each violation. The good thing is that the new legislation has almost stopped foreclosure.

The bad thing is that the banks would have glut of homes which it cannot dispose off easily. The surplus homes would create problem for everyone including the banks, homeowners, and of course the local economy. The continuous auctioning of these properties were a capitalistic action which should not be stopped for any convenience. Again, if banks are at fault, the homeowners have not done justice with their contracts as well. Many of the delinquencies are deliberate and intentional. These “walks-aways” should be punished. Everyone should be made responsible for their actions or inactions. Furthermore, it may tempt many people to be intentionally delinquent on their homes. They may avoid taking care of these homes because they had no attachment. Possibly, they may not pay the HOA dues. Now, we have homeowners living in these homes, and still not taking care of their property. The problem with delinquency, and dependency (as you may see with immigrants coming from Communist countries, who get government housing, ration, jobs etc) that they do not strive enough to make their justified living when they come to US. Unfortunately, this dependency is taught in USA creating road blocks to the capitalistic system. We are unfortunately heading towards a socialistic economy. We should not forget that we live in a capitalistic society and should not help greedy and needlessly protect greedy and non law-abiding people. Of course, we are creating a massive delinquent homeowners society who had scant regard of their promissory notes, contracts, and ethical agreements. These folks always shift the accusation on someone else. They have not done anything wrong according to them. All the wrongs were done by their lenders, servicers. This is a very bad way to handle the recovery on homes. This would create the height of lack of accountability. Even though we had supported homeowners (and always would do) but the unintended result of this law would have a terrible effect on the banks and the general restoration of our economy.

What should have been done?

A simple solution which of course would not need the congressional approval (as they have the tendency to mess up everything) would be to encourage banks to refinance the mortgage of everyone regardless of the appraisal or the FICO score. Come on! FICO cannot be upright, everyone’s credit had taken too many hits in this struggling economy. It is difficult to keep your heads above water. So the basic solution is following:

1. Give refinance to every homeowner or at least the choice of it on the current interest rate. No one should be denied

2. No penalties, or fines of any kind.

3. Ignore FICO

4. Ignore appraisal. It is gimmick. (May be a drive by appraisal can be used)

4. This refinancing would generate plenty of business for lenders, brokers, loan agents, appraisers, home construction specialists etc. It would rejuvenate our markets. Every one would be busy and make money. This is the only solution towards restoration of our economy. I hope Mr. Obama would be listening. Mr. Obama can also fire his treasury secretary along with housing secretary. They have proven to be nincompoop. I personally think these folks are playing the same role what Dan Quayle had done for George Bush’s (Sr.) in his relection campaign. (he was the biggest hurdle in his reelection)

More Foreclosure in Nevada and Continuous Robo-Signature Controversy

We have been stressing throughout this foreclosure ordeal in Nevada that there is something more messier then what is visible on the face (prima facie). WE are witnessing more bad news as JPMorgan Chase halted 56,000 foreclosures amid doubts that it had correctly followed laws on the foreclosure process. This news came soon after the announcement from GMAC Mortgage when suspended an undisclosed number of foreclosures to gain time to check its legal procedures. Now, Bank of America has announced similar measures. No one cared for this before the bubble as that was the notorious days for “no doc”, “low-doc” loans. Unfortunately, same spirit was shown in creating rapid foreclosures by mass production of these forged signatures, and foreclosure default notices and avoidance of states notice laws. After the bubble, banks, mostly large banks had consistently applied all kinds of tactics to frustrate federal government help in denying loan modifications of all sorts by either straight denial, or by hiring incompetent people, not supporting enough telephone lines or asking too much and needless paperwork. Now we learn that foreclosures, the end of the mortgage pipeline, have also been handled with a disregard for rules and standards. Here, we can see nothing but a continuous pattern of ineptness and incompetence. At issue now are affidavits that a foreclosing lender must file in many states’ courts. The person signing the affidavits attests to having knowledge of important facts, like the lender’s legal standing to foreclose and the amount owed. But in a rush to process hundreds of thousands of foreclosures, it turns out that the signers at Chase and GMAC processed 10,000 or more documents a month — “robo-signing” in industry parlance — without personal knowledge of the facts. They were like signature machines affixing their signatures on thousands of documents without testing its reliability or authenticity.

We can not satisfy ourselves that hundreds and thousands of families have lost their homes while legal process was denied to them by these rob signature machine production of documents. Now, most of these crooked banks had stopped this process but what about people whose homes has already been foreclosed and their credit tarnished for the rest of their lives. Let us hope that banks learn some lesson. Some 700 or more of them had already closed, and some of them are still teetering on the brink of a disaster, but of course they never learn. To the extent the suspensions ensure a process that is legal and fair, they are to the good. But delays feed uncertainty, and that could be bad for the economy. Will they result in fewer foreclosures, helping to prop up prices? Or will they create a backlog of foreclosed homes that will push prices down when they come to market?

As we know that the central weakness in the administration’s antiforeclosure efforts is that participation by lenders has been voluntary. Banks should be advised to have their participation mandatory. The robo-signing scandal is yet another reminder that it is folly to rely on banks that got us into this mess to get us out. The Obama administration needs to revise its ways to help people. It would be good to fire Treasury secretary at this time. That would revive some of the lost expectations of Obama administration. 18 months is too long to have some teeth in the administration hands to curb this rising trends of foreclosure in Nevada. A recent article published in NY Times indicates how bad the economy is in Nevada at this time.
http://www.nytimes.com/2010/10/03/us/03vegas.html?hp

Even TV covering the foreclosure crisis

Economic crisis is deepening in our everyday life, and even the big celebrities of TV are showing the signs of this omnipresent depression. The sitcom depicts and discusses this crisis often and celebrities are taking part-time jobs. Here is an interesting article just published. As usual the law office of Malik Ahmad www.fastbankruptcynevada.com is willing to help its clients and offer them free bankruptcy consultation.

http://www.nytimes.com/2009/03/12/arts/television/12plot.html?_r=1

Are there limitations on what can be garnished?

Are there limitations on what can be garnished?
Wage garnishments
Exempt earnings are not subject to garnishment. Exempt earnings are those which are not subject to judicial process (including garnishment) according to federal and state law. 15 U.S.C. § 1673 is one such statute that restricts the amount that can be garnished. The maximum amount that can be garnished cannot exceed the lesser of:
– 1.25 per centum of disposable earnings for that week, or
– the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of Title 29 in effect at the time the earnings are payable 15 U.S.C. § 1673, whichever is less.
Non-wage garnishment
A variety of limitations are placed on non-wage garnishments.
What are the Statutory Exemptions in Nevada (which cannot be garnished)
NRS 21.090  Property exempt from execution.
1.  Exempt Property in Nevada:
(a) Private libraries, works of art, musical instruments and jewelry not to exceed $5,000 in value, belonging to the judgment debtor or a dependent of the judgment debtor, to be selected by the judgment debtor, and all family pictures and keepsakes.

(b) Necessary household goods, furnishings, electronics, wearing apparel, other personal effects and yard equipment, not to exceed $12,000 in value, belonging to the judgment debtor or a dependent of the judgment debtor, to be selected by the judgment debtor.

(c) Farm trucks, farm stock, farm tools, farm equipment, supplies and seed not to exceed $4,500 in value, belonging to the judgment debtor to be selected by the judgment debtor.

(d) Professional libraries, equipment, supplies, and the tools, inventory, instruments and materials used to carry on the trade or business of the judgment debtor for the support of the judgment debtor and his or her family not to exceed $10,000 in value.

(e) The cabin or dwelling of a miner or prospector, the miner’s or prospector’s cars, implements and appliances necessary for carrying on any mining operations and the mining claim actually worked by the miner or prospector, not exceeding $4,500 in total value.
(f) Except as otherwise provided in paragraph (p), one vehicle if the judgment debtor’s equity does not exceed $15,000 or the creditor is paid an amount equal to any excess above that equity.
(g) For any workweek, 75 percent of the disposable earnings of a judgment debtor during that week, or 50 times the minimum hourly wage prescribed by section 6(a)(1) of the federal Fair Labor Standards Act of 1938, 29 U.S.C. § 206(a)(1), and in effect at the time the earnings are payable, whichever is greater. Except as otherwise provided in paragraphs (o), (s) and (t), the exemption provided in this paragraph does not apply in the case of any order of a court of competent jurisdiction for the support of any person, any order of a court of bankruptcy or of any debt due for any state or federal tax. As used in this paragraph:
(1) “Disposable earnings” means that part of the earnings of a judgment debtor remaining after the deduction from those earnings of any amounts required by law to be withheld.
(2) “Earnings” means compensation paid or payable for personal services performed by a judgment debtor in the regular course of business, including, without limitation, compensation designated as income, wages, tips, a salary, a commission or a bonus. The term includes compensation received by a judgment debtor that is in the possession of the judgment debtor, compensation held in accounts maintained in a bank or any other financial institution or, in the case of a receivable, compensation that is due the judgment debtor.
(h) All fire engines, hooks and ladders, with the carts, trucks and carriages, hose, buckets, implements and apparatus thereunto appertaining, and all furniture and uniforms of any fire company or department organized under the laws of this State.
(i) All arms, uniforms and accouterments required by law to be kept by any person, and also one gun, to be selected by the debtor.
(j) All courthouses, jails, public offices and buildings, lots, grounds and personal property, the fixtures, furniture, books, papers and appurtenances belonging and pertaining to the courthouse, jail and public offices belonging to any county of this State, all cemeteries, public squares, parks and places, public buildings, town halls, markets, buildings for the use of fire departments and military organizations, and the lots and grounds thereto belonging and appertaining, owned or held by any town or incorporated city, or dedicated by the town or city to health, ornament or public use, or for the use of any fire or military company organized under the laws of this State and all lots, buildings and other school property owned by a school district and devoted to public school purposes.
(k) Life Insurance: All money, benefits, privileges or immunities accruing or in any manner growing out of any life insurance.
Homestead: (l) The homestead as provided for by law, including a homestead for which allodial title has been established and not relinquished and for which a waiver executed pursuant to NRS 115.010 is not applicable.
(m) Dwelling: The dwelling of the judgment debtor occupied as a home for himself or herself and family, where the amount of equity held by the judgment debtor in the home does not exceed $550,000 in value and the dwelling is situated upon lands not owned by the judgment debtor.
(n) Rent Deposit: All money reasonably deposited with a landlord by the judgment debtor to secure an agreement to rent or lease a dwelling that is used by the judgment debtor as his or her primary residence, except that such money is not exempt with respect to a landlord or the landlord’s successor in interest who seeks to enforce the terms of the agreement to rent or lease the dwelling.
(o) All property in this State of the judgment debtor where the judgment is in favor of any state for failure to pay that state’s income tax on benefits received from a pension or other retirement plan.
(p) Any vehicle owned by the judgment debtor for use by the judgment debtor or the judgment debtor’s dependent that is equipped or modified to provide mobility for a person with a permanent disability.
(q) Any prosthesis or equipment prescribed by a physician or dentist for the judgment debtor or a dependent of the debtor.
(r) Money, not to exceed $500,000 in present value, held in:
(1) An individual retirement arrangement which conforms with the applicable limitations and requirements of section 408 or 408A of the Internal Revenue Code, 26 U.S.C. §§ 408 and 408A;
(2) A written simplified employee pension plan which conforms with the applicable limitations and requirements of section 408 of the Internal Revenue Code, 26 U.S.C. § 408;
(3) A cash or deferred arrangement which is a qualified plan pursuant to the Internal Revenue Code;
(4) A trust forming part of a stock bonus, pension or profit-sharing plan which is a qualified plan pursuant to sections 401 et seq. of the Internal Revenue Code, 26 U.S.C. §§ 401 et seq.; and
(5) A trust forming part of a qualified tuition program pursuant to chapter 353B of NRS, any applicable regulations adopted pursuant to chapter 353B of NRS and section 529 of the Internal Revenue Code, 26 U.S.C. § 529, unless the money is deposited after the entry of a judgment against the purchaser or account owner or the money will not be used by any beneficiary to attend a college or university.
(s) All money and other benefits paid pursuant to the order of a court of competent jurisdiction for the support, education and maintenance of a child, whether collected by the judgment debtor or the State.
(t) All money and other benefits paid pursuant to the order of a court of competent jurisdiction for the support and maintenance of a former spouse, including the amount of any arrearages in the payment of such support and maintenance to which the former spouse may be entitled.
(u) Payments, in an amount not to exceed $16,150, received as compensation for personal injury, not including compensation for pain and suffering or actual pecuniary loss, by the judgment debtor or by a person upon whom the judgment debtor is dependent at the time the payment is received.
(v) Payments received as compensation for the wrongful death of a person upon whom the judgment debtor was dependent at the time of the wrongful death, to the extent reasonably necessary for the support of the judgment debtor and any dependent of the judgment debtor.
(w) Payments received as compensation for the loss of future earnings of the judgment debtor or of a person upon whom the judgment debtor is dependent at the time the payment is received, to the extent reasonably necessary for the support of the judgment debtor and any dependent of the judgment debtor.
(x) Payments received as restitution for a criminal act.
(y) Payments received pursuant to the federal Social Security Act, including, without limitation, retirement and survivors’benefits, supplemental security income benefits and disability insurance benefits.
(z) Any personal property not otherwise exempt from execution pursuant to this subsection belonging to the judgment debtor, including, without limitation, the judgment debtor’s equity in any property, money, stocks, bonds or other funds on deposit with a financial institution, not to exceed $1,000 in total value, to be selected by the judgment debtor.
(aa) Any tax refund received by the judgment debtor that is derived from the earned income credit described in section 32 of the Internal Revenue Code, 26 U.S.C. § 32, or a similar credit provided pursuant to a state law.
(bb) Stock of a corporation described in subsection 2 of NRS 78.746 except as set forth in that section.
(cc) Regardless of whether a trust contains a spendthrift provision:
(1) A distribution interest in the trust as defined in NRS 163.4155 that is a contingent interest, if the contingency has not been satisfied or removed;
(2) A distribution interest in the trust as defined in NRS 163.4155 that is a discretionary interest as described in NRS 163.4185, if the interest has not been distributed;
(3) A power of appointment in the trust as defined in NRS 163.4157 regardless of whether the power has been exercised;
(4) A power listed in NRS 163.5553 that is held by a trust protector as defined in NRS 163.5547or any other person regardless of whether the power has been exercised; and
(5) A reserved power in the trust as defined in NRS 163.4165 regardless of whether the power has been exercised.
(dd) If a trust contains a spendthrift provision:
(1) A distribution interest in the trust as defined in NRS 163.4155 that is a mandatory interest as described in NRS 163.4185, if the interest has not been distributed; and
(2) Notwithstanding a beneficiary’s right to enforce a support interest, a distribution interest in the trust as defined in NRS 163.4155 that is a support interest as described in NRS 163.4185, if the interest has not been distributed.
(ee) Proceeds received from a private disability insurance plan.
(ff) Money in a trust fund for funeral or burial services pursuant to NRS 689.700.
(gg) Compensation that was payable or paid pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS as provided in NRS 616C.205.
(hh) Unemployment compensation benefits received pursuant to NRS 612.710.
(ii) Benefits or refunds payable or paid from the Public Employees’ Retirement System pursuant to NRS 286.670.
(jj) Money paid or rights existing for vocational rehabilitation pursuant to NRS 615.270.
(kk) Public assistance provided through the Department of Health and Human Services pursuant to NRS 422.291 and 422A.325.
(ll) Child welfare assistance provided pursuant to NRS 432.036.
2.  Except as otherwise provided in NRS 115.010, no article or species of property mentioned in this section is exempt from execution issued upon a judgment to recover for its price, or upon a judgment of foreclosure of a mortgage or other lien thereon.
3.  Any exemptions specified in subsection (d) of section 522 of the Bankruptcy Act of 1978, 11 U.S.C. § 522(d), do not apply to property owned by a resident of this State unless conferred also by subsection 1, as limited by subsection 2.

How to handle lawsuits filed by lenders for second trust deed in Nevada?

This is a complex topic and should only be left to seasoned attorneys. Our law office, Law Office of Malik W. Ahmad is well situated to handle these kinds of lawsuits and we have successfully settled, or litigated to an acceptable levels all such lawsuits.

Guarantors of a purchase-money loan on real property in Nevada should now be entitled to the anti-deficiency protections afforded under NRS 40.455 through 40.459, w which statutes limit the amount of any deficiency judgment to the lesser of either:

1. The amount by which the amount of the indebtedness which was secured exceeds the fair market value of the property sold at the time of the sale, with interest from the date of the sale, or

2. The amount which is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured, with interest from the date of sale.

The Nevada legislature has recently enacted Nevada Assembly Bill 273, which provides a third subsection with applicability in situations where a foreclosing lender “acquired the right to obtain the judgment from a person who previously held that right”, such as where an originating lender sell a note to a third party lender. In such a situation, the deficiency amount is limited (beyond the amounts described in NRS 40.459(1) and (2), described above), to also include the further limitation to any available deficiency that: “If the person seeking the judgment acquired the right to obtain the judgment from a person who previously held that right, the amount [of deficiency recoverable is limited by the amount] by which the amount of the consideration paid for that right exceeds the fair market value of the property sold at the time of sale or the amount for which the property was actually sold, whichever is greater, with interest from the date of sale and reasonable costs, whichever is the lesser amount.” The intent of the Nevada legislature was clearly to provide certain protections to guarantors.

The Nevada Supreme Court has expressly held that guarantors are entitled to the benefits of Nevada’s anti-deficiency legislation, stating that without such protection, the court “would thereby detach lenders from the deficiency standard imposed by the legislature and subject guarantors to the vagaries of a lender’s scruples in every transaction.” First Interstate Bank of Nevada v. Shields, 102 Nev. 616, 619, 730 P.2d 429 (1986) (emphasis supplied). The Ninth Circuit, applying the Shields decision, has similarly held that guarantors are entitled to the benefits and protections of Nevada’s anti-deficiency legislation. FBW Enterprises v. The Victorio Company, 821 F.2d 1393, 1394-95 (9th Cir. 1987).

The Nevada legislature has recently enacted new legislation aimed at avoiding the scenario of a lender suing a guarantor without first foreclosing. Under Nevada Assembly Bill 273, signed by the Nevada Governor on June 10, 2011, the following language was added to NRS 40.495:

(4) If, before a foreclosure sale of real property, the obligee commences an action against a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, to enforce an obligation to pay, satisfy, or purchase all or part of an indebtedness or obligation secured by a mortgage or lien upon the real property:

(a) The court must hold a hearing and take evidence presented by either party concerning the fair market value of the property as of the date of the commencement of the action. Notice of such hearing must be served upon all defendants who have appeared in the action and against whom a judgment is sought, or upon their attorneys of record, at least 15 days before the date set for the hearing.

(b) After the hearing, if the court awards a money judgment against the debtor, guarantor or surety who is personally liable for the debt, the court must not render judgment for more than:

(1) The amount by which the amount of the indebtedness exceeds the fair market value of the property as of the date of the commencement of the action; or

(2) If a foreclosure sale is concluded before a judgment is entered, the amount that is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured, whichever is the lesser amount.

Deficiency Judgments
The lender has the right to sue the borrower for the deficiency within six months after the date of the foreclosure sale, unless all of the following conditions are met:
• The mortgage lender is a financial institution.
• The property securing the mortgage is a single-family dwelling.
• The borrower was the owner of the property at the time of the foreclosure sale.
• The borrower used the proceeds of the mortgage to purchase the property.
• The property was the borrower’s primary residence continuously after the borrower took out the mortgage.
• The borrower did not refinance the mortgage.

If all of these conditions are met, the homeowner is not liable to the lender for any deficiency remaining after the foreclosure sale. Nev. Rev. Stat. § 40.455.
The amount of the deficiency is limited to the lesser of these two amounts:
• The difference between the amount of the outstanding mortgage debt and the property’s fair market value at the time of the foreclosure sale, or
• The difference between the amount of the outstanding mortgage debt and the foreclosure sale price. Nev. Rev. Stat. §40.459.

Summary of NV Laws Nonjudicial Not if all of the following conditions are met: (a) lender is a financial institution; (b) mortgage loan originated on or after October 1, 2009; (c) property securing mortgage is a single-family dwelling owned by borrower at the time of the foreclosure sale; (d) mortgage debt was used to purchase the property; (e) property was borrower’s primary residence continuously from the time mortgage was executed; and (f) borrower did not refinance the mortgage. Allowed in all other foreclosures, but amount that may be recovered is limited to lesser of (a) the difference between the outstanding debt and the fair market value, or (b) the difference between the outstanding debt and the foreclosure sale price.

Nevada Laws about foreclosure: NRS 40.455 Deficiency Judgment

CHAPTER 40 – ACTIONS AND PROCEEDINGS IN PARTICULAR CASES CONCERNING PROPERTY
NRS 40.455 Deficiency judgment: Award to judgment creditor or beneficiary of deed of trust; exceptions.
1. Except as otherwise provided in subsection 3, upon application of the judgment creditor or the beneficiary of the deed of trust within 6 months after the date of the foreclosure sale or the trustee’s sale held pursuant to NRS 107.080, respectively, and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if it appears from the sheriff’s return or the recital of consideration in the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively.

Note: The time period has been changed to six months by an application or award to a judgment creditors after the sale of the foreclosure sale.

2. If the indebtedness is secured by more than one parcel of real property, more than one interest in the real property or more than one mortgage or deed of trust, the 6-month period begins to run after the date of the foreclosure sale or trustee’s sale of the last parcel or other interest in the real property securing the indebtedness, but in no event may the application be filed more than 2 years after the initial foreclosure sale or trustee’s sale.

Note: this six-month period would run after the date of the foreclosure or trustee’s sale of the last parcel or other interest in the real estate property securing the indebtedness.

3. If the judgment creditor or the beneficiary of the deed of trust is a financial institution, the court may not award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust, even if there is a deficiency of the proceeds of the sale and a balance remaining due the judgment creditor or beneficiary of the deed of trust, if:
(a) The real property is a single-family dwelling and the debtor or grantor was the owner of the real property at the time of the foreclosure sale or trustee’s sale;
(b) The debtor or grantor used the amount for which the real property was secured by the mortgage or deed of trust to purchase the real property;
(c) The debtor or grantor continuously occupied the real property as the debtor’s or grantor’s principal residence after securing the mortgage or deed of trust; and
(d) The debtor or grantor did not refinance the mortgage or deed of trust after securing it.
4. As used in this section, “financial institution” has the meaning ascribed to it in NRS 363A.050.
(Added to NRS by 1969, 573; A 1979, 450; 1985, 371; 1987, 1345; 2009, 1330)

What is the difference between a mortgage and a trust deed?

Difference between Mortgage and Deed of Trust
We hear these terms in almost synonymous terms as people understand them in similar terms but they are two diverse concepts, terms, and entails different legal procedure. Notable difference between them is that they are two different types of security interests.

A mortgage is a two-party transaction. The lender, known as the mortgagee, places a lien on your house. It accepts the mortgage from you, the mortgagor, in exchange for loaning money to purchase your home. If you default, the lender can do a non-judicial foreclosure in which his/her senior interests are superior to anyone else under the purchase money mortgage terms, and supersedes any interests of a junior trust deed.

Deed of Trust is a three-party transaction with three parties:

The three parties are the
(1) beneficiary,
(2) trustor, and the
(3) trustee.

The lender is called the beneficiary because it benefits from the transaction by collecting interest. You are the trustor because you are “trusted” with the money. The final party is the trustee, who holds title for the benefit of the beneficiary. The trustee’s sole function is to initiate the foreclosure at the behest of the lender. Deed of Trust foreclosure does not require a Lawsuit. If you default, the trustee follows procedures agreed to in the Deed of Trust pursuant to the power of sale clause which does not involve the court also known as a Non-Judicial Foreclosure.

Lender can sue you for deficiency after foreclosure
The lender to sue you for any money still owed to it if the auction does not bring enough money to pay off the loan. However, Nevada has adopted antideficiency laws where the deficiency is waived, restricted or time barred.

Nevada Antideficiency laws?
Nevada Revised Statutes 40.451 deals with deficiency. (We are publishing more articles on Nevada antideficiency laws in our additional articles here) Nevada is a deficiency state where the lender may sue a homeowner after foreclosure for the amount the house sold that was less than what was owed. The homeowner will then have to pay the lender any amount that was due on the loan that was not paid off at sale.
However, there is time limit to file the deficiency lawsuit and in Nevada, it must be filed within six (6) months after the foreclosure sale, and the amount of the deficiency judgment is determined by a statutory formula. An appraisal is obtained to determine the actual fair market value on the date of sale. The homeowner is given a credit for the appraised value, or the sales price, whichever is greater.

Nevada garnishment and how to handle it.

Garnishment is not something which cannot happen to you: its signs must be visible for quite some time. You can see them from a distance.
– You may get notices, which you ignore and you are burying your head into sand.
– You do not open your mail,
– Ignore the phone call, or just can’t see writing on the wall.
– It is a last-ditch effort at debt collection and hits at your paycheck. Of course it hits it hard and draws your quick attention. Now, you are awake and don’t know what to do.
– However, if you move with some lightning speed, you can be helped. Time again is the essence.
– When facing credit card debt that can’t readily be paid, the best plan of action is to act early reach some sort of payment arrangement and stick to a repayment plan.
– The court intervenes when everything else fails. Now, the question is can you move fast and stop this financial bleeding?
Garnishment is a legal and judicial remedy: It is authorized by a court either after full hearing or pursuant to a default judgment against you. It should be considered a collection tool of last resort. It is mostly a judicial action authorizing the judgment creditor, or the constable to go and levy your wages. It is a direction from the constable office (In Nevada) to your payroll to start deducting a certain and defined amount from your wages in every pay period until satisfied.
Not all garnishment are court initiated:
It is true that most of the garnishment is court authorized but there are some limited exceptions to it. In every case, it is best to go to your payroll and ask them a copy of the garnishment execution papers.
Exceptions to Court Sanctioned Garnishment:
There is no need to go to court for garnishment in at least the following situations:
a. Student Loan
b. Spousal Support
c. IRS taxes.
d. Certain specified lien.
You Should Stop the Evil In the Bud:
As we stated before you can see the signs of garnishment and many cases they are predictable. In our office, we hear all kinds of stories. They levied my bank account and took all the money, or I did not know anything about legal lawsuit against me. Come on guys, you were ignoring all the letters send to you. You just did not open any judicial mail sent to your address. Well, if you changed your address, you still are bound to receive your mail. Why? Because it is your job to go to the post office and change your address. Clients are often embarrassed when faced with garnishment because now their paycheck is involved, which means their employer is aware of their financial situation. Employers are typically required to tell workers about the withheld amount. Also, you should remember that it is against the law for an employer to fire an employee whose wages are garnished, but embarrassment is noted and it does not paint a good picture especially if you are working in a financial environment.
Still No Bid Deal:
Here, the garnishment papers had been served on you and you also got a notification from your payroll. But, still something can be done.
1. Come and meet us at the Law Office of Malik W. Ahmad (702) 270-9100, make an appointment. Of course, we listen to you patiently. The Judgment Creditor is still shaky though he had reached you and can grab a part of your paycheck. But what is the guarantee that he would continuously receive the garnished amount. If you leave the job, they have to start this process all over again, and it is complicated and expensive process.
2. You can start the bankruptcy process. Of course, we are here to help you.
3. If you do not like to file bankruptcy, definitely we can settle with you creditors if you have some financial capacity or make one time settlement. Of course Law Office of Malik Ahmad had helped many debtors in this regard. Desperation cannot resolve anything: only strong determination can resolve your financial matters.
4. The only recourse for a consumer after a judgment has been rendered is to ask the court to adjust the amount of the garnishment if the reduction in pay severely impacts the consumer’s ability to support himself and any dependents.
5. If a judgment is rendered in a state where the garnishment law differs from federal law, the law requires the court to adjust the garnishment to the lesser amount.
Don’t bury your head in the sand:
No need to be ostriches and bury your head into the sand, you can be helped in very short period of time. No need to stay miserable. If you wanted to be helped, you can be helped.
Laws on garnishing
While the garnishment laws vary from state to state and bank to bank but here we are only discussing wage garnishment as applicable in the state of Nevada. Again, state and federal law regulate the amount of money that may be garnished from a consumer’s wages or bank account. In Nevada, it is 25% of the total wages. Again, it is hefty amount regardless and can upset your budget and limited income. Also, it is like a bolt from the blue for which you or your family is not ready. This garnishment can be on top of other debts and liabilities. A garnishment is a serious encroachment into your financial matters; it also leaves a very heavy derogatory impact on your credit report
No need to be scared, as help available to you. Just call the law office of Malik W. Ahmad at (702) 270-9100.

What are the limitations on deficiency judgment in Nevada?

Nevada Statute NRS 40.458 deals with Deficiency judgment as this placed many limitations and propitiation Award to judgment creditor or beneficiary of deed of trust under certain circumstances.

Financial Institution: 1. If the judgment creditor or the beneficiary of the deed of trust who applies for a deficiency judgment is a banking or other financial institution, the court may not award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if:
Single Family Dwelling: (a) The real property is a single-family dwelling and the debtor or the grantor of the deed of trust was the owner of the real property at the time of the sale in lieu of a foreclosure sale;
Bought a Property: (b) The debtor or grantor used the amount for which the real property was secured by the mortgage or deed of trust to purchase the real property;
Continuous Occupation: (c) The debtor or grantor continuously occupied the real property as the debtor’s or grantor’s principal residence after securing the mortgage or deed of trust;
Sale to a third party for lesser amount: (d) The debtor or grantor and the banking or other financial institution entered into an agreement to sell the real property secured by the mortgage or deed of trust to a third party for an amount less than the indebtedness secured thereby; and
(e) The agreement entered into pursuant to paragraph (d):
(1) Does not state the amount of money still owed to the banking or other financial institution by the debtor or grantor or does not authorize the banking or other financial institution to recover that amount from the debtor or grantor; and
(2) Contains a conspicuous statement that has been acknowledged by the signature of the debtor or grantor which provides that the banking or other financial institution has waived its right to recover the amount owed by the debtor or grantor and which sets forth the amount of recovery that is being waived.
2. As used in this section:

What is the definition of a financial Institution?
(a) “Banking or other financial institution” means any bank, savings and loan association, savings bank, thrift company, credit union or other financial institution that is licensed, registered or otherwise authorized to do business in this State.
(b) “Sale in lieu of a foreclosure sale” means a sale of real property pursuant to an agreement between a person to whom an obligation secured by a mortgage or other lien on real property is owed and the debtor of that obligation in which the sales price of the real property is insufficient to pay the full outstanding balance of the obligation and the costs of the sale. The term includes, without limitation, a deed in lieu of foreclosure.
(Added to NRS by 2011, 2051)

What is the Limitations on the Amount of Money Judgment?

NRS 40.459 Limitations on amount of money judgment.
1. After the hearing, the court shall award a money judgment against the debtor, guarantor or surety who is personally liable for the debt. The court shall not render judgment for more than:
(a) The amount by which the amount of the indebtedness which was secured exceeds the fair market value of the property sold at the time of the sale, with interest from the date of the sale;
(b) The amount which is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured, with interest from the date of sale; or
(c) If the person seeking the judgment acquired the right to obtain the judgment from a person who previously held that right, the amount by which the amount of the consideration paid for that right exceeds the fair market value of the property sold at the time of sale or the amount for which the property was actually sold, whichever is greater, with interest from the date of sale and reasonable costs,
 whichever is the lesser amount.
2. For the purposes of this section, the “amount of the indebtedness” does not include any amount received by, or payable to, the judgment creditor or beneficiary of the deed of trust pursuant to an insurance policy to compensate the judgment creditor or beneficiary for any losses incurred with respect to the property or the default on the debt.

How the distribution of proceeds of foreclosure sale is done in Nevada?

Section NRS 40.462 deals with the Distribution of proceeds of foreclosure sale in Nevada.
1. The proceeds of a foreclosure sale must be distributed in the following order of priority:
(a) Payment of the reasonable expenses of taking possession, maintaining, protecting and leasing the property, the costs and fees of the foreclosure sale, including reasonable trustee’s fees, applicable taxes and the cost of title insurance and, to the extent provided in the legally enforceable terms of the mortgage or lien, any advances, reasonable attorney’s fees and other legal expenses incurred by the foreclosing creditor and the person conducting the foreclosure sale.

(b) Satisfaction of the obligation being enforced by the foreclosure sale.

(c) Satisfaction of obligations secured by any junior mortgages or liens on the property, in their order of priority.

(d) Payment of the balance of the proceeds, if any, to the debtor or the debtor’s successor in interest.

 If there are conflicting claims to any portion of the proceeds, the person conducting the foreclosure sale is not required to distribute that portion of the proceeds until the validity of the conflicting claims is determined through interpleader or otherwise to the person’s satisfaction.
3. A person who claims a right to receive the proceeds of a foreclosure sale pursuant to paragraph (c) of subsection 2 must, upon the written demand of the person conducting the foreclosure sale, provide:
(a) Proof of the obligation upon which the claimant claims a right to the proceeds; and
(b) Proof of the claimant’s interest in the mortgage or lien, unless that proof appears in the official records of a county in which the property is located.
 Such a demand is effective upon personal delivery or upon mailing by registered or certified mail, return receipt requested, to the last known address of the claimant. Failure of a claimant to provide the required proof within 15 days after the effective date of the demand waives the claimant’s right to receive those proceeds.
4. As used in this section, “foreclosure sale” means the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale pursuant to NRS 107.080.

New Settlement Expected on Home Loans Abuses

NY Times have the latest news about a new settlement which is expected between government regulators and representatives of 14 big bank. This could be worth

$10 billion settlement with 14 banks that would end the government’s efforts to hold lenders responsible for foreclosures abuses for faulty paperwork and excessive fees that may have led to evictions, according to people with knowledge of the discussions.

“Under the settlement, a significant amount of the money, $3.75 billion, would go to people who have already lost their homes, making it potentially more generous to former homeowners than a broad-reaching pact in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief for Americans.

Most of the relief in both agreements is meant for people who are struggling to stay in their homes and need the banks to reduce their payments or lower the amount of principal they owe.”

The $10 billion pact would be the latest in a series of settlements that regulators and law enforcement officials have reached with banks to hold them accountable for their role in the 2008 financial crisis that sent the housing market into the deepest slump.  As of early 2012, four million Americans had been foreclosed upon since the beginning of 2007, and a huge amount of abandoned homes swamped many states, including California, Florida and Arizona.

Questions About Nevada Exemptions? How, When, Where?

What happens after the Debtor files his affidavit claiming exemption?
The constable or sheriff is to release the property to the Debtor within 9 judicial days after the claim of exemption has been served unless the Creditor files an objection to the claim of exemption and notice for a hearing are not filed within 8 judicial days after the claim of exemption has been served NRS 21.112.
When is a hearing on the property exemption to be scheduled? If an objection to the claim of exemption and notice for a hearing is filed by the Creditor with the court within 8 judicial days after the claim of exemption was served, the Creditor shall also serve a notice of the date of the hearing not less than 5 judicial days before the date set for the hearing. NRS 21.112
What should I do if the creditor requests a hearing? Be prepared to prove at the hearing that your property is exempt. Bring receipts, bills of sale, Kelly Blue Books, assessors’ statements, vehicle registration renewals, monthly bank statements or whatever else is necessary to prove your claim.
If you convince the judge of your claim, he or she will order that the money or property be released to you. If the judge determines that the property is not exempt, he or she will not return the property to you.
If the judge denies my exemption claim, do I have any appeal rights?
Yes. It is best to contact an attorney immediately to obtain assistance.

Can exempt property ever be taken? There are certain situations in which otherwise exempt property can be executed upon. Included are:
• When the judgment entered against you is for child support, some of the listed exemptions such as 75% of take-home pay, do not apply.
• Where a bankruptcy court orders that the property be taken.
• If the judgment is to satisfy certain tax liens.
• Where the judgment was for the purchase, loan or improvement on that property – for example, the remaining installment payment on a used car which you bought.
What can I do if I have property or wages which are not exempt from execution?
To avoid garnishment or attachment if you have non-exempt wages or property generally your options are to either:
• Pay the debt either in full or through a payment plan that is negotiated with the creditor or imposed by a court;
• Convert non-exempt property to exempt property- for example, filing a homestead exemption on your house; or
• Erase the debt through a bankruptcy.
For expert assistance in deciding the option which is best for you may contact any bankruptcy attorney or the Law Office of Malik W. Ahmad at (702) 270-9100. They can refer to you an appropriate agency for a nominal fee to get these financial counseling and debtors education classes.
To file a bankruptcy, you should consider hiring an attorney if you can afford one.

How does the debtor claims an exemption?

How does the Debtor claim an exemption?
Just because property attached is exempt, the Debtor must bring this to both the Creditor and Court’s attention. In order to claim exemption of any property levied on, the debtor must, within 10 days after the Notice of Execution is mailed, serve on the constable and plaintiff and file with the clerk a claim of exemption on a form provided by the clerk. NRS 21.112. The clerk will also provide a checklist and description of the most commonly claimed exemptions, instructions concerning the manner in which the property must be released if no objection is filed and an order to be used by the court to grant or deny an exemption. No fee may be charged for providing such a form or for filing the form with the court.
The claim of exemption is to be accompanied by all documents relied upon by the party claiming the exemption. JCRLV 27.

Nevada Exemptions to Money Judgment

What are Nevada Exemptions against Money Judgment (things which cannot be collected) from Defendants

An exempt property is that which cannot be garnished or forefeited even if there is a judgment against you. In other words, there are certain types of property that cannot be taken from you even if you have a judgment against you. This property is called exempt property. Included in the property which is exempt under Nevada law (NRS 21.090) are:
■75% of your disposable earnings or 50 times the minimum wage (currently $362.50 per week) which ever is higher.
■Payments received as disability, illness or unemployment benefits
■Workers Compensation (SIIS) benefits
■Welfare benefits, public assistance benefits from the Nevada State Welfare Division (TANF, Food Stamps, etc.) or local government (like General Assistance)
■Veterans benefits
■Social Security and Supplementary Security Income
■Social Security disability payments
■Amounts paid pursuant to a court order for child support or maintenance of a former spouse.
■Vocational rehabilitation benefits
■Certain federal and state retirement monies
■Certain Individual Retirement Accounts
■Life insurance proceeds, if your annual premium is less than $15,000
■One vehicle, if your equity (the market value minus how much you owe) is under $15,000, unless the lawsuit concerned the loan on the vehicle.
■A “homesteaded” house or mobile home, even if you do not own the land. The exemption protects up to $550,000 of the home’s value. It can protect up to 100% if the judgment is for a medical bill or you establish “allodial title”. The homestead exemption does not apply if the judgment was for the mortgage or a mechanic’s lien upon the property.
■Necessary household goods, personal effects, and yard equipment, (maximum $12,000).
■Professional Libraries, equipment, supplies, and the tools, inventory, and materials to carry on your trade or business for the support of yourself or your family (maximum $10,000); Private libraries, works of art, musical instruments and jewelry which belong to you or your dependent (maximum of $5,000).
■Compensation for personal injury up to $16,150 (excluding pain and suffering or actual pecuinary loss) to you or your dependents.
■Certain compensation for the wrongful death of a person upon whom you were dependent to the extent reasonably necessary to support you and your dependents.
■Compensation for the loss of your future earnings or the future earnings of a person upon whom you were dependent to the extent reasonably necessary to support you and your dependents.
■Restitution payments to you for a criminal act.
■A security deposit on your primary residence.
■Personal property, not to exceed $1,000 in total value, if the property is not otherwise exempt.
■A tax refund received from the earned income credit provided by federal law or a similar state law.
■Proceeds received from a private disability insurance plan.
■Money in a trust fund for funeral or burial services pursuant to NRS 689.700.
■Compensation that was payable or paid pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS as provided in NRS 616C.205.
■Unemployment compensation benefits received pursuant to NRS 612.710.
■Benefits or refunds payable or paid from the Public Employees’ Retirement System pursuant to NRS 286.670.
■Money paid or rights existing for vocational rehabilitation pursuant to NRS 615.270.
■Public assistance provided through the Department of Health and Human Services pursuant to NRS 422.291.
■Child welfare assistance provided pursuant to NRS 432.036.
■If money has been deposited into a personal bank account electronically within the immediately preceding 45 days from the date on which the writ was served which is reasonably identifiable as exempt from execution under federal law, notwithstanding any other deposits of money into the account, $2,000 or the entire amount in the account, whichever is less, is exempt.
■For personal bank accounts which do not contain exempt federal funds deposited electronically, $400 or the entire amount in the account, whichever is less, is is exempt, unless the writ of execution or garnishment is for the recovery of money owed for the support of any person.

Note: This is not a complete list of exemptions. Call the law office of Malik W. Ahmad at (702) 270-9100 to discuss your personal situation. Remember, we offer 20 minutes of our time free.

Nevada Exemptions to Money Judgment

What are Nevada Exemptions against Money Judgment (things which cannot be collected) from Defendants

An exempt property is that which cannot be garnished or forefeited even if there is a judgment against you. In other words, there are certain types of property that cannot be taken from you even if you have a judgment against you. This property is called exempt property. Included in the property which is exempt under Nevada law (NRS 21.090) are:
■75% of your disposable earnings or 50 times the minimum wage (currently $362.50 per week) which ever is higher.
■Payments received as disability, illness or unemployment benefits
■Workers Compensation (SIIS) benefits
■Welfare benefits, public assistance benefits from the Nevada State Welfare Division (TANF, Food Stamps, etc.) or local government (like General Assistance)
■Veterans benefits
■Social Security and Supplementary Security Income
■Social Security disability payments
■Amounts paid pursuant to a court order for child support or maintenance of a former spouse.
■Vocational rehabilitation benefits
■Certain federal and state retirement monies
■Certain Individual Retirement Accounts
■Life insurance proceeds, if your annual premium is less than $15,000
■One vehicle, if your equity (the market value minus how much you owe) is under $15,000, unless the lawsuit concerned the loan on the vehicle.
■A “homesteaded” house or mobile home, even if you do not own the land. The exemption protects up to $550,000 of the home’s value. It can protect up to 100% if the judgment is for a medical bill or you establish “allodial title”. The homestead exemption does not apply if the judgment was for the mortgage or a mechanic’s lien upon the property.
■Necessary household goods, personal effects, and yard equipment, (maximum $12,000).
■Professional Libraries, equipment, supplies, and the tools, inventory, and materials to carry on your trade or business for the support of yourself or your family (maximum $10,000); Private libraries, works of art, musical instruments and jewelry which belong to you or your dependent (maximum of $5,000).
■Compensation for personal injury up to $16,150 (excluding pain and suffering or actual pecuinary loss) to you or your dependents.
■Certain compensation for the wrongful death of a person upon whom you were dependent to the extent reasonably necessary to support you and your dependents.
■Compensation for the loss of your future earnings or the future earnings of a person upon whom you were dependent to the extent reasonably necessary to support you and your dependents.
■Restitution payments to you for a criminal act.
■A security deposit on your primary residence.
■Personal property, not to exceed $1,000 in total value, if the property is not otherwise exempt.
■A tax refund received from the earned income credit provided by federal law or a similar state law.
■Proceeds received from a private disability insurance plan.
■Money in a trust fund for funeral or burial services pursuant to NRS 689.700.
■Compensation that was payable or paid pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS as provided in NRS 616C.205.
■Unemployment compensation benefits received pursuant to NRS 612.710.
■Benefits or refunds payable or paid from the Public Employees’ Retirement System pursuant to NRS 286.670.
■Money paid or rights existing for vocational rehabilitation pursuant to NRS 615.270.
■Public assistance provided through the Department of Health and Human Services pursuant to NRS 422.291.
■Child welfare assistance provided pursuant to NRS 432.036.
■If money has been deposited into a personal bank account electronically within the immediately preceding 45 days from the date on which the writ was served which is reasonably identifiable as exempt from execution under federal law, notwithstanding any other deposits of money into the account, $2,000 or the entire amount in the account, whichever is less, is exempt.
■For personal bank accounts which do not contain exempt federal funds deposited electronically, $400 or the entire amount in the account, whichever is less, is is exempt, unless the writ of execution or garnishment is for the recovery of money owed for the support of any person.

Note: This is not a complete list of exemptions. Call the law office of Malik W. Ahmad at (702) 270-9100 to discuss your personal situation. Remember, we offer 20 minutes of our time free.

Bank of America Agrees to Settle for 10 Billion dollars–Great Victory

Finally, Bank of America says it will spend more than $10 billion to settle mortgage claims resulting from the housing meltdown. This was announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans.

Bank of America bought Countrywide Financial Corp. in July 2008, just before the financial crisis. Countrywide was a giant in mortgage lending, but was also known for approving risky loans. Fannie Mae and Freddie Mac, which packaged loans into securities and sold them to investors, were effectively nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses.

Bank of America’s purchase of Countrywide originally was lauded by lawmakers because the bank was viewed as stepping in to eliminate a bad actor from the mortgage market. But instead of padding Bank of America’s mortgage business, the purchase has drawn a drumbeat of regulatory fines, lawsuits and losses.

Bank of America said that the loans involved in the settlement have an aggregate original principal balance of about $1.4 trillion. The outstanding principal balance is about $300 billion. Bank of America Corp., which is based in Charlotte, N.C., also said that it is also selling mortgage servicing rights on about 2 million residential mortgage loans. The loans have an aggregate unpaid principal balance of approximately $306 billion.

Nevada Foreclosure Laws (Part 4)

Summary of NV Foreclosure Laws
If you are a residential homeowner who is or may be facing foreclosure in Nevada, this article will give you the summary and all information you will need to know. This article will help you answer the following questions:
• What is the foreclosure process in Nevada?
• What rights do you have to cure or reinstate your mortgage?
• Are there any state law protections for homeowners in financial distress?

How to Locate Nevada’s Foreclosure Laws
The citation to Nevada’s foreclosure law is Nevada Revised Statutes Sections 40.430 to 40.463 and 107.080 to 107.110. Judicial foreclosures are covered in Sections 40.430 to 40.463, and nonjudicial foreclosures are covered in Sections 107.080 and 107.110.

Nevada’s foreclosure statutes can be found in “Chapter 40: Actions and Proceedings in Particular Cases Concerning Property.”
• Scroll down to find Sections 40.430 to 40.450, which are listed under the heading “Actions for Foreclosure of Real Mortgages,” and Sections 40.451 to 40.463, which are listed under the heading “Foreclosure Sales and Deficiency Judgments.”

To find Sections 107.080 to 107.110, follow steps one through three above, click “Chapter 107: Deeds of Trust,” then scroll down to the sections listed under the heading “Default and Sale.”

Summary of Nevada’s Foreclosure Laws
A summary of the most important information in Nevada’s foreclosure laws relevant to residential homeowners is presented below. Because nonjudicial foreclosures are the most common type of foreclosure in Nevada, this information focuses on nonjudicial foreclosures. “Mortgage lender” refers to the bank or financial institution holding the mortgage, and “borrower” refers to the residential homeowner.

Nonjudicial Foreclosure
A mortgage lender does not need to sue the borrower in court to foreclose. Once a borrower has defaulted on his or her mortgage, the lender has the right to sell the property securing the mortgage, subject to certain requirements. Nev. Rev. Stat. § 107.080.

Borrower’s Right to Cure
A homeowner has up to five days prior to the date of the foreclosure sale to prevent the foreclosure sale by making any missed payments on the mortgage or by curing any other deficiency, as well as paying for the mortgage lender’s foreclosure fees or expenses. Nev. Rev. Stat. § 107.080.

Notice Requirements
The mortgage lender must file a notice of breach and election to sell with the office of the recorder in the county where the property is located. This notice must be recorded at least three months before the date of the foreclosure sale. Nev. Rev. Stat. § 107.080. After this three-month period expires, the mortgage lender must file the notice of sale with the county recorder, as well as deliver the notice of sale to the borrower by registered or certified mail, post the notice for 20 days in three public places, and publish in a newspaper a copy of the notice once a week for three consecutive weeks. Nev. Rev. Stat. § 107.080.

Along with the notice of default and election to sell, the mortgage lender must provide the borrower the following information:
• Contact information for the person authorized to negotiate a loan modification on behalf of the lender
• Contact information for at least one local housing counseling agency; and
• A form on which the borrower may elect mediation. Nev. Rev. Stat. § 107.086.

Mediation
The mortgage lender is required to notify the borrower of the availability of mediation. If the homeowner requests mediation, the lender may not take further action to foreclose on the property. Nev. Rev. Stat. § 107.086. If your goal is to delay foreclosure as long as possible, it is in your best interest to elect mediation.

Right of Redemption
In nonjudicial foreclosures, homeowners do not have a right of redemption. Nev. Rev. Stat. § 107.080(5).

Nevada Foreclosure, Deficiency Laws and Statutory Time Period

What is the role of the recourse loan?
A loan is termed recourse if the borrower is personally liable for its repayment and nonrecourse if he is not. After a foreclosure, a lender can go after a recourse loan borrower for the difference between the market value of the home at sale and the outstanding loan balance by suing for a deficiency judgment. It is barred from going after a nonrecourse loan borrower. State law often affects the classification of a loan as recourse or nonrecourse. In Nevada, any mortgage taken out to purchase a property is considered nonrecourse. Any refinanced loan or loan taken out after the purchase is recourse. Many, but not all, second mortgages are recourse.

Nevada’s One-Action Rule
Under Nevada rules, if a foreclosing lender wants to collect a deficiency judgment, it must use the judicial foreclosure process because state law limits it to one action against the borrower. A deficiency judgment may be wrapped into a judicial foreclosure but not with a non-judicial foreclosure. If the foreclosing lender owns both the first and second mortgages, then it must use the judicial foreclosure process to collect any remaining debt associated with either the first or first or second mortgages.

Lien Wiped Out But Not Debt
If the lenders of the first and second mortgages of a Nevada mortgage are different, the first mortgage holder will foreclose and the second will not. The second mortgage is wiped out as a lien in the foreclosure. However, the underlying debt and agreement between the borrower and lender remains if the mortgage was a recourse debt. Because the second mortgage holder did not participate in the foreclosure, it is still allowed its “one action” against the borrower to recover the debt. The second mortgage holder is able to file a lawsuit against the borrower for his failure to repay the debt. This is an action unrelated to foreclosure.

A second mortgage is a loan that was obtained after another mortgage loan secured by the same property. The general purpose of providing mortgage security on a loan is to give the lender the right to foreclose if the borrower stops making payments. The problem with second mortgages is that the foreclosure rights under a second mortgage are inferior to the foreclosure rights of the first mortgage loan. Foreclosure on a first mortgage loan may eliminate the second mortgage loan.

Notice
The first mortgage lender and second mortgage lender each has a mortgage lien on the same piece of property. When a mortgage lender forecloses, the lender has to involve all parties holding an ownership or lien interest in that property. Therefore, if the first mortgage lender initiates foreclosure on the property, it must involve the second mortgage lender in that foreclosure process. In judicial foreclosure, this means the second lender must be a party to the foreclosure lawsuit, while in nonjudicial, or power of sale, foreclosure, this means the foreclosing lender has to provide notice to the second lender.

Lien Elimination
When a mortgage lender forecloses, the lender causes the secured property to be sold at a public auction. The purchaser at the auction acquires whatever right the foreclosing lender had in the property at the time when the mortgage loan first attached to the property. By definition, a second mortgage lien does not attach to the property until after the first mortgage lien has attached to that property. Accordingly, foreclosure on a first mortgage loan results in the discharge and elimination of the second mortgage lender’s lien on the property.

Right to Proceeds
A foreclosure sale produces sales proceeds that can be used to pay off liens on the property sold. In some foreclosures, the sales price may be high enough to pay off the first mortgage lien, but not any other liens in the property. In fact, most foreclosure sales result in the mortgage lender making a credit bid equal to the amount due on the mortgage loan, which means the sales price is exactly equal to the payoff balance on the first mortgage. As a result, there is no extra money to pay off the second mortgage lender, so the second mortgage lender remains unpaid and loses its lien on the property. But, if the sales price is high enough, there may be enough money to pay off the first mortgage plus some or all of the second mortgage.

Lien Protection
A second mortgage lender’s only option to protect its lien on the property is to pay off the first mortgage before the foreclosure sale. The second mortgage lender has the right to pay the first mortgage lender the total balance due on the first mortgage loan. If that happens, the first mortgage lien is paid off, thereby causing the second mortgage lien to move into the position of first mortgage lien. However, this option requires the second mortgage lender to come up with the cash necessary to pay off the first mortgage.

Nevada Laws About Foreclosure, Deficiency and Statutory Time Period (Part 3)

Should you buy trust deed property sale?
What is First Lien?
Let us say that if you purchase a property at a foreclosure sale on a second trust deed, this means you will purchase the property subject to an existing first lien on the property. That lien will remain on the property after you become the owner following the foreclosure sale. Foreclosure on a lien results in the elimination of any junior liens, but not any senior liens, and a first deed of trust lien is senior to the second deed of trust lien.

Title Review
You should always review the title of the property so you should know the quality and health of your title as this would save you from many problems and of course any potential litigation and headache. You have to determine the quality of the lien and its standing, if it is first line or second or third because your rights would depend upon this standard. In other words, if it were superior lien, or junior lien, the procedure would be different. It is good to go through an escrow company who can vouch for a title, and find out about the liens on the title. Only once you get the assurance, then you go ahead.

First Lien Payoff
The easiest way to clear title to property after a foreclosure on a secondary lien is to simply pay off the first lien on the property. You can always negotiate this with the lender, but it is appropriate to find it first how much flexibility they have, because once you buy second trust deed, your hands are tied, and you cannot bargain much. The owner of the property always has the right to pay off liens on the property. You can contact the first deed lender and request a payoff balance. If you can come up with the cash, you can pay off the first mortgage and have the lien removed from the property. Paying cash, of course, is the best way, as cash is king, but cash is also limited and unavailable in many situations.

Nevada Laws About Foreclosure (Part 2)

What is the procedure in judicial foreclosure:
The judge will issue an order that clarifies the condition of title. It may remove all the clouds on this title, or leave some open. A lawsuit may be helpful, or even necessary, in order to clear the title after foreclosure on a second trust deed. Payment may also be required.

In a judicial foreclosure, the lender file a lawsuit in a Court and file or should have filed a lis pendens against the property and, if the borrower loses the lawsuit, the Court enters a judgment on the debt and orders it executed against the secured property through a foreclosure sale. A lis pendens should always be filed, as this is a simple work and our law office can help in filing any such lis pendens and also how to remove it. This is a convenient tool in a jurisdiction which is called notice jurisdiction. The property is then sold as part of a publicly noticed sale by the Sheriff or Constable as noted above. After a judicial sale, the borrower has one year (12 months) after the foreclosure sale to redeem the property; that is to say, the borrower (or assignee of the borrower) has one year to come back and pay the price paid by the purchaser at the foreclosure sale (plus interest and some statutory processing fees) and the borrower (or assignee) will get the property back. This is intended to discourage buyers from underbidding the property, as if they do, the borrower (or assignee or even a minority lien holder) can get it back for the same price.

Can you file Quiet Title Action in Nevada?
Another option for attempting to clear the title to your property is to file a quiet title lawsuit in Nevada state court. A quiet title lawsuit results in the issuance of a judicial order clarifying all interests in, or claims to, the property. When you file the lawsuit, you will have to serve a summons on the first mortgage lender. If the first mortgage lender does not appear in the lawsuit, that lender’s lien on the property can be removed in the quiet title judgment. Most likely, however, the first mortgage lender will appear in the lawsuit in order to protect its valuable lien right. If they show up, you can negotiate to a handsome deal. In fact, even if they show the intent, making a handsome offer can get you a better deal. Therefore, a quiet title action may be a futile effort. It is impossible to predict what a mortgage lender will do in a quiet title suit.