How to Use Loan Modification to Stop Foreclosure in Nevada?


How Loan Modification Can Be Used To Stop Foreclosure?

Foreclosure is on the rise in Nevada, and everyday scores of homes are foreclosed in Nevada through non-judicial foreclosure process. Remember, there are two kinds of foreclosure: Judicial and Non-judicial and Nevada is a non judicial foreclosure state. In this article, we like to discuss how to avoid an impending foreclosure by starting a loan modification request.

Rule No. 1: Open channels of communication with your bank. Call the Loss Mitigation, or Loan Modification number of your bank right away. Do not hesitate on this issue under any condition.

Rule No. 2: Find and give your financial information right away. Make sure you ask the bank if they have a package for financial information needed to be send to them. Download from their website and sent it to them on the given fax number. Make sure you get the right fax number from Loss Mitigation Department.

Rule No. 3. Tell your lender that you are a primary home owners and have no intention to let this property go to foreclosure.

Rule No. 4: Tell your lender that you have a great payment history.

Rule No. 5: Tell your lender your story, either on phone or via letter. Send a strong hardship letter to them.

Rule No. 6: Ask them again and again if they have received your documentation. If not, send them again.

Rule No. 6: No need to argue, or indulge in heated discussion. Talk on the same level as your representative. Most of these folks are hard working and eager to help. Their education level is slightly above the high school levels, and some of them have this job as the starter job in their career.

Rule No. 7: Do not lose temper under any condition.

Rule No. 8: Write a diary in a systematic way, and write down the name of the representative, name of the supervisors, and date and time.

Rule No. 9: It is hard for your lender to foreclose as well. They will lose half of the value of the home, and they are also trying their best to stop it.

Rule No. 10: Ask them again and again, if they want short sale if loan modification is not possible. A yes answer means more time, and meanwhile you can chalk out other strategy.

More Rules:

1. Make a diary of all the phone calls.

2. Write down the number and name of the person you spoke.

3. Make sure you ask them again, if they are from collection department. Basically, these collectors would give you the impression that they are from loan modification or workout department. They will waste your time by asking you idiotic questions which has no direct link with loss mitigation. At the end, they would try to collect money from you. Because they have no impact, on the overall scheme, and you probably have no money to pay them, so be polite and firm with them, and tell them if they can connect you to loss mitigation. Remember, again Countrywide, they have too many layers to trick you and too many phone number with recording devices.

4. This one bank, or servicer EMC. It is deceptive. Each time you call them, their recording device is full of none sense. Even the recording device tell you the waiting time is 9 minutes. If you call them in the middle of the night, the waiting time is still 9 minutes. Once I waited for about 25 minutes. This is the most crooked customer service. I wonder if someone would take notice of their deception.

5. Oh yeah, City–the mother of all deceptive trade practices. Citi had eaten up close to 70 billion dollar of bailout money, and has one of the horrible customer service. They once gave me a fax number which was busy, and I got at least 30 busy printout from my fax. They are hesitant to talk to attorneys for reasons well known to them. I wish and pray this bank is either nationalized or go bankrupt. I have no compassion for them and of course Countrywide.WaMU is still not a bad bank. Even though they were the most generous people in giving money to every undeserving person but at least their customer service is better than both City and Countrywide.

6. Lots of lenders has their website full of information, and there are some changes coming in their attitude. It is public pressure, and some Congress pressure collectively. Also, they have seen the writing on the wall. Basically, it is the crooked old leadership who was awash with bonuses and big paychecks, who was reluctant to bring any major changes. I say get rid of all these fossils of the past, and start with younger people in major decision making.

More later

Complete List of Your Loss Mitigations Lenders


It is difficult to reach your lender. They have built a Chinese wall around them, and at times they were successful. However, we are publishing the following list of your lenders which can be reached. Some telephone numbers may still be inaccessible. Please let us know so we can change them. Of course, the Law Office of Malik Ahmad continuously change these numbers, and update new numbers. Basically, numbers are the game. Let us give them back some.

Lender/Servicer Loss Mitigation Phone Numbers & Contact InformationABM AMRO Mortgage (800) 783-8900
Web: https://www.mortgage.com/C3/application.bus
Accredited Home Lenders(877) 683-4466AMC Mortgage Services (Also handles loans originated by Ameriquest and Argent) (800) 211-6926
1600 McConnor Parkway
Schaumburg, IL 60173
Web: https://www.myamcloan.com/malwebapp/begin.doAmerican Home Mortgage Corp.(877) 304-3100*Ameriquest Mortgage (Debt collection — see AMC Mortgage Services) (800) 211-6926Aurora Loan Services (Debt collection) (800) 550-0508
By Overnight Mail:
601 5th Avenue
Scottsbluff, NE 69361
Attn: Customer Service
By Regular Mail:
P.O. Box 1706
Scottsbluff, NE 69363
E-mail: ccnmail@alservices.com
Web: https://www.alservices.com/Consumer/UI/SSL/Authentication/Login.aspx?ReturnUrl=%2fConsumer%2fUI%2fSSL%2fServ icing%2fDefault.aspx

Avelo Mortgage LLC (866) 992-8356*Bank of America(800) 846-2222BB&T Mortgage (800) 827-3722*

AmTrust Bank (fka Ohio Savings Bank) (888) 696-4444

Beneficial (800) 333-5848

Central Pacific Bank (800) 342-8422*

Charter One (800) 234-6002

Chase (800) 446-8939
Chase Home Finance (800) 848-9136 (customer service) (858) 605-2181 (delinquency customer service)
Chase Home Finance-New Jersey(800) 446-8939*Chevy Chase Bank(800) 933-9100*
Web: https://chaseonline.chase.com/chaseonline/logon/sso_logon.jsp?fromLoc=ALL&LOB=COLLogon

Chase Manhattan Mortgage
(800) 446-8939 (Ohio Servicing Center)
(800) 526-0072 (Florida Servicing Center)
(800) 527-3040 x533 (Florida Servicing Center) Chevy Chase Bank (800) 933-9100
Web: https://www.chevychasebank.com/htm/payment.html (Payment Addresses)Citi Financial Mortgage (800) 753-3673Citimortgage (800) 283-7918

Countrywide (800) 262-4218

https://customers.countrywide.com/se…t_login254.asp

Ditech (800) 852-0656 (800) 449-8582Downey Financial Corp.(800) 824-6902, ext. 6696Deutsche Bank National Call Number on Mortgage Statement

EMC 800-723-3004
P.O. Box 141358
Irving, TX 75014-1358
Web: https://www.emcmortgageservicing.com/ccn/ccnsecurity.aspEverBank (800) 669-7724 ext. 4730Equity One (Debt collection) (866) 361-3460

First Horizon Home Loans (800) 489-2966*

Fifth Third Bank (800) 375-1745 Option 3

First Merit Bank (888) 728-9931

Flagstar Bank (800) 968-7700, ext. 9780

Fremont Investment & Loan (866) 484-0291

GMAC Mortgage (800) 850-4622

GreenPoint Mortgage Funding (800) 784-5566, ext. 5383*

Green Tree (877) 816-9125

Homecomings Financial (800) 850-4622*

HomeEq Mortgage Servicing ( Debt collection) (866) 822-1471

Household Finance (A HSBC Co.) (800) 333-5848

Household Mortgage (800) 333-4489
Household Mortgage -(Is now called HSBC Mortgage Services) (800) 365-6730

HSBC Mortgage Corp.(there is a difference between Mortgage Services and Corp. placed new number) (800) 338-6441
Default Resolution Team (if long term problem)
2929 Walden Avenue
Depew, NY 14043
(888) 648-3124 Loss Mit
(732) 352-7519 Fax
Web:http://us.hsbc.com/personal/mortgage HSBC Mortgage (800) 338-6441
Default Resolution Team (if long term problem)
2929 Walden Avenue
Depew, NY 14043
(888) 648-3124 Loss Mit
(732) 352-7519 Fax
Web:http://us.hsbc.com/personal/mortgage/existing/difficulties.aspHuntington National Bank (800) 323-4695 Indymac Bank (877) 736-5556
C/O Loan Resolution Department
P.O Box 7014
Pasadena, CA 91107
(Monday – Friday 6:15am-7:15pm. (Pacific Time))
Web: https://www.indymacbank.com/contactus/loanResolution.asp

Irwin Mortgage (888) 218-1988
P.O Box 7014
Pasadena, CA 91107
Web: https://www.irwinmortgage.com/wps/portal/!ut/p/cxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4g3sdAvyHZUBAAqwx 9c
E-mail: deliquency.prevention@irwinmortgage.com

James B. Nutter & Company (800) 315-7334

Key Bank (800) 422-2442

LaSalle National Bank (800) 783-8900

Litton Loan Servicing (800) 999-8501 or (800) 548-8665
Fax (713) 966-8820
4828 Loop Central Drive
Houston, Texas 77081-2226
Web: https://www.littonloan.com/index.asp

Loss Mitigation Department Hours:
Monday Eastern: 9 a.m. – 7 p.m. Central:8 a.m. – 6 p.m. Mountain:7 a.m. – 5 p.m. Pacific:6 a.m. – 4 p.m.
Tuesday-Thursday Eastern:9 a.m. – 9 p.m. Central:8 a.m. – 8 p.m. Mountain:7 a.m. – 7 p.m. Pacific:6 a.m. – 6 p.m.
Friday Eastern:10 a.m. – 6 p.m. Central:9 a.m. – 5 p.m. Mountain:8 a.m. – 4 p.m. Pacific:7 a.m. – 3 p.m.
Default Counseling Department representatives are also available most weekends on Saturday from 8 a.m. to 12 p.m. and Sunday from 10 a.m. to 2 p.m. (CST).Midland Mortgage (800) 552-3000 or (800) 654-4566
Web: https://www.mymidlandmortgage.com/MyMortgage/Login/Login.asp

Mortgage Lenders Network (800) 691-0129
E-mail: customerservice@mlnusa.com
Web: http://www.mlnusa.com/customers/info_credithelp.asp

Mortgage Electronic Registration Systems (888) 679-6377National City (800) 367-9305, Ext. 53221 or (800) 523-8654
Attention: Homeowner’s Assistance
3232 Newmark Dr.
Miamisburg, Ohio 45342
(8AM-10:30PM ET, Monday – Thursday)
(8AM-5PM ET, Friday)
(8AM-Noon, Saturday)
Web: http://www.nationalcitymortgage.com/service_assistance.aspNationwide Advantage Mortgage Company (800) 356-3442, ext. 6002*NationStar Mortgage (888) 850-9398* Press 0 for operator

New Century Financial Now Carrington Mortgage Services (800) 790-9502 or (877) 206-9904
(6:00 a.m. to 7:00 p.m. Pacific Time, Monday – Thursday)
(6:00 a.m. to 6:00 p.m. Pacific Time, Friday)
Web: https://myloan.newcentury.com/webapps/servicing/myloans/index.do

NovaStar Mortgage Loan Resolution Department (888) 743-0774 Non-English: (888) 743-0774, ext. 4523Ocwen Federal Bank (800) 746-2936 or (877) 596-8560
Web: http://www.ocwencustomers.com/csc_fa.cfm

Attention: Financial Information
12650 Ingenuity Drive
Orlando, Florida 32826
or
Ocwen Financial Corporation
1661 Worthington Rd., Suite 100
West Palm Beach, Florida 33409
Phone: 877-226-2936For serving Ocwen with legal process, please send to their registered agent:
Corporation Service Company
2711 Centerville Road, Suite 400
Wilmington, DE 19808
Phone: 561-682-8000, x8386Option One (866) 711-1962 or (888) 275-2648
Web: http://www.oomc.com/servicing/servicing_baifaqs.aspPHH Mortgage (Formerly Cendant) (800) 257-0460
For borrowers facing possible delinquency: (800) 330-0423*
For borrowers in the foreclosure process: (800) 750-2518
Web:https://www.phhmortgage.com/sso/mq/login.jsp?TYPE=33554433&REALMOID=06-9153316d-cf4d-4425-a5d7-c0b20a7b098d&GUID=&SMAUTHREASON=0&METHOD=GET&SMAGE NTNAME=phhmort-stb&TARGET=$SM$https%3a%2f%2fwww%2ephhmortgage%2ec om%2fhome%2flandscape%3fjpid%3dLogIn%26loginmode%3 dregistered&SMSESSION=NO

ResMae Mortgage Corp.(877) 473-7623, ext. 5944Saxon (800) 665-7367Select Portfolio Servicing (888) 818-6032
Fax: (801) 293-3936
Loan Resolution Department
P.O. Box 65250
Salt Lake City, UT 84165-0250
(Monday – Thursday 10:00 a.m. – 10:00 p.m. EST)
(Friday 10:00 a.m. – 7:00 p.m. EST)
(Saturday 9:00 a.m. – 1:00 p.m. EST)
Web: http://www.spservicing.com/services/customer/loanresolution.htm

SkyBank (800) 290-3359Sun Trust Mortgage (800) 634-7928
PO Box 26149
Richmond, VA 23260-6149
Mail Code RVW 3003Web: https://www.suntrustmortgage.com/generalquestions.asp#

Third Federal Savings (888) 844-7333

US Bank (800) 365-7900

Wachovia Bank of Delaware (866) 642-8608

Washington Mutual (866) 926-8937 or (888) 453-3102 or (800) 478-0036 or (800) 254-3677

Waterfirld Mortgage (800) 957-7245
Fax: (260) 459-5390
c/o Loss Mitigation Dept.
7500 W. Jefferson Blvd.
Fort Wayne, IN 46804
(7 am – 10 pm EST Monday – Thursday)
(7 am – 9 pm EST Fridays)
(8 am – 2 pm EST Saturdays)
E-Mail: saveyourhome@waterfield.com
Web: http://www.waterfield.com/scripts/cgiip.exe/WService=wfg/pub/borrowerservices/delqasst

Wells Fargo (877) 216-8448 or (866) 261-5642 or (800)766-0987 or (800) 678-7986 for payment assistance
Borrower Counseling Services
Monday – Friday 8:00 a.m. – 9:00 p.m., CT
Saturday 9:00 a.m. – 2:00 p.m., CT
Web: https://www.wellsfargo.com/mortgage/account/

Wendover Financial Services Corporation (800) 934-1081 or (800) 436-1022
Web: http://www.wendover.com/borrowers.html

Wilshire Credit Corporation (888) 502-0100
P.O. Box 8517
Portland, OR 97207-8517
From 6 a.m. to 5 p.m. (Pacific time) Monday through Friday
Web: http://www.wfsg.com/borrower/borrower.aspx

*No direct line to the loss mitigation or loan modification department. But I am working on it Loan Modification & Loan Workout ApplicationsChase Loan Modification Application

Option One Loan Modification Application

HSBC Online Loan Modification Application

Private Contacts Wendy Knafelc at Washington Mutual Loss Mitigation: (904) 732-8425 — wendy.knafelc@wamv.net

How to Defend Foreclosures in Nevada?


Defending Wrongful Foreclosure Actions in Nevada

Foreclosures in Nevada are on the rise, and our law office is contacted everyday by people from all walks of life inquiring about how to stop foreclosure and other foreclosure related questions. It is a complex area of laws, and we do not suggest to go alone or hire an unlicensed attorney or an out of state attorney or their production firm. A Nevada licensed attorney would be an ideal agency to handle such complex legal cases.

Nevada, as we know is a non-judicial foreclosure state. It simply means that your lender does not have to go to court to get a foreclosure status against you. A simple non judicial procedure is enough to foreclose on your property.

In Nevada, a notice of intent to foreclose is followed by a notice of default which is followed by a notice of trustee’s sale. The last step, the actual non-judicial foreclosure sale, usually occurs within approximately 90 days (and in some cases longer from the filing of the notice of default. For the vast majority of loans, the Nevada non-judicial foreclosure process is an effective and relatively inexpensive method for a servicer to obtain its security. In most non-judicial foreclosures, the only court time and court costs involved are those for the usually uncontested municipal court unlawful detainer which is initiated by the servicer in order to obtain possession from former borrowers who refuse to vacate their former homes.

For a small but seemingly growing number of loans, the non-judicial foreclosure process has has almost become judicial. Increasingly, this war has been taken to courts and even in Nevada, a large number of these cases had been filed in court. This war of attrition ranges from bankruptcy, to District Courts Nevada, and to US District Court. It is not a war to stop eviction in municipal courts of Nevada. They are only mean to stop illegal detainer.
Before we go any farther, we like to outline once more the steps taken by your lender in foreclosing your property in Nevada.
Foreclosure Process in General in Nevada:
Most of the loans are premised upon continuous payments to the lenders. If these payments are not timely paid, or not continuously paid, the borrowers can start the foreclosure process. The lender reviews the loan documents and determines about the occurrence of a default. Failure to make loan payments triggers this default process. Also, it is contingent upon events which have not been corrected by payments or failure of a workout package.

A trustee under a deed of trust may exercise its statutory power of sale without the judicial intervention. In Nevada, the foreclosure is mostly a statutory foreclosure. (NRS 107.080(1)). Judicial foreclosures are also permitted under Nevada law (NRS 40.430-40.450) but judicial foreclosures are not the preferred choice in Nevada for most of the lenders because of the looming danger of the right of redemption. Upon default, the initial step is for either the beneficiary or the trustee to execute a notice of breach and election to sell, which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b)). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to see must be recorded in the county in which the property encumbered by the trust deed is situated. This notice must also be mailed (notice of breach and election to sell) by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3)

Notice of Default and Election to Sell?
1. Must describe the property
2. Must describe the deficiency in performance of payment.
3. May contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligations so permit (NRS 107.080(3).
4. Within 10 days of recording and mailing the notice of default to the trustor, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who has either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by register3ed or certified mail, return receipt requested. (NRS 107.090.)
5. Nevada laws make it immaterial whether the notice is actually received by the trustor. The notice is effective nonetheless. (Turner v. Dewco Services, Inc., 87 Nev. 14, 479 P. Wd 462 (1971)
6. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (referred to below as “trustor or interested person”) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. (NRS 108.080(3). If the trustor other interested persons “make good” the deficiency in payment or performance within the 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.080(2)(a), (3). The 35-day period in the statute exists independently of any notice or cure periods contained the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incidents to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment (NRS 107.080(3).

What is the Procedure for Trustee’s Sale?
When three months have elapsed from the date of the recordation of the notice of breach and election to sell, the trustee may give notice of the time and place of the trustee’s sale, which notice must be given in accordance with the statutory provisions for execution sales of real property – posted notice in three public places for 20 successive days and published once a week for three consecutive weeks. (NRS 107.080(4);231.130(1)©. The trustee’s sale may be held at the office of the trustee anywhere in Nevada, even if it is not in the county where the property being sold is located. (NRS 107.080(4).
If the power of sale is exercised in compliance with the Nevada statute, the purchaser is vested with the title of the trustor, without equity or right of redemption NRS 107.080(5).
What are the Guarantor’s Rights to Notice and Subrogation?
The notice of breach and election to sell must be mailed by certified mail, postage prepaid, to each guarantor or surety of the debt at the address of each if known, or at the address of the trust property. The notice must also be mailed to any other obligor who has filed a request for a copy of the notice under NRS107.090. Failure to provide such notice would release that guarantor, surety or obligor from liability on the obligation. (NRS 107.095(1).

Under NRs 107.095(3) a guaranty, surety or other obligor is not released if the required notice is give at least fifteen (15) days before the later of the expiration of the 35-day period described in NRs 107.080 or any extension of that period by the beneficiary, or if the notice of default is rescinded before the sale id advertised.

Upon full satisfaction by the guarantor, surety or other obligor, other than the trustor, of the indebtedness secured by a mortgage or lien, the paying guarantor or obligor is entitled to enforce every remedy which the beneficiary has against the trustor, and is entitled to an assignment from the beneficiary of all of the rights the beneficiary then has by way of security for the payment or performance of the trustor. NRS 40-475 (1989). Such an obligor is also entitled to subrogation, junior only to the secured lender’s rights, in the case of partial satisfaction of the indebtedness. (NRS 40.485 (1989). These rights may only be waived by the guarantor, surety or other obligor after default. NRs 40.495(1)(1989).
What are the rights under One Action Rule?
In Nevada, a deficiency judgment can be filed under non statutory foreclosure provisions without having filed a judicial foreclosure.

What is a deed of Trust in Nevada?
The most common type of security interest in real property in Nevada is a Deed of Trust. A DOT has three parties.
Lender: It is the first party who is referred to as “Beneficiary.”
Borrower: It is the second party who is referred to as the “Maker”, or “Grantor”, or “Trustor” who conveys legal title to the property to the Trustee.
Trustee: This is the third party who holds legal title to the property.
Process: A DOT can be foreclosed in a simple process and cheaper as well. A Trustee sells the property encumbered by the DOT. All the lender needs to do in order to foreclose on a DOT is to determine that an even of default has occurred under the DOT and have the trustee conduct non-judicial foreclosure proceedings. Here, in Nevada, the trustee sale does not entail redemption. The borrower, in Nevada, does not have the statutory rights of redemption unlike the judicial foreclosure where the right of redemption lasts one year. Compare NRs 107.080(5) (no right of redemption in a foreclosure on a DOT ) with NRs 21.210 (one year period of redemption).

Determination of Default.
Your default notice also consists of a determination of default. It can be monetary or non monetary. Monetary is when it is linked to borrowers failure to pay, failure to pay property taxes, failure to pay homeowners association assessments and failure to pay special improvements and other assessments against the property. The non monetary events of default are spelled out in the notice of default and Deed of Trust as well as related loan documents. They can be failure to insure property, the failure to maintain debt service coverage ratios and waste.

Acceleration of Obligation:
A trustee under a deed of trust may exercise its statutory power of sale (commencement of foreclosure process) without judicial intervention in Nevada. NRs 107.080(1). Judicial foreclosure is also permitted under Nevada laws though seldom exercised. (NRs 40.430-40-450). They carry with them a one year right of redemption which lenders does not like it as they like to close this chapter once for all.

Steps in Foreclosure in Nevada?
1. The beneficiary or the trustee to execute a notice of breach and election to sell which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to sell must be recorded in the county in which the property encumbered by the trust deed is situated. The notice of breach and election to sell must also be mailed by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3).
2. The notice and election must describe the deficiency in performance or payment, and may contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligation so permit. (NRS 107.080(3).
3. Within ten days of recording and mailing to the trustor the notice of default, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who had either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by registered or certified mail, return receipt requested. (NRS 107.90)
4. Under Nevada law, it is immaterial whether the notice is actually received by the trustor. Turner v. Dewco Services, Inc., 87 Nev 14. 479 P.2d 462 (1971).
5. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (trustor or interested persons) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. NRS 107.080(3). If the trustor or other interested person “make good” the deficiency in payment or performance within 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRs 107.80(2)(a), (3). The 35-day period in the statue exists independently of any notice or cure periods contained in the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment. NRS 107.080(3).
6. Nevada Revised Statutes Chapter 107 governs Deeds of Trusts. The transfer of real property may be made in trust to secure loans and other obligations. See NRs 107.020. In the event a transfer is made in trust to secure payment, the Trustee is granted a power of sale which may be exercised if an event of default has occurred. See generally NRS 107.080.

How a Foreclosure Process in Nevada is Commenced?

1. The lender must first determine that an event of default has taken place.
2. The lender employs the Trustee or a successor.
3. The Trustee will prepare and record in the Office of the County of Records of the County in which the property is located a Notice of Default and Election To Sell. (NRS 107.080).
4. The Notice of Default and Election to Sell must be mailed by registered or certified mail, return receipt requested Election to Sell must be mailed by registered or certified mail, return receipt requested and postage prepaid, to the grantor of the Deed of Trust, the person who holds title of record on the date of the Notice of Default and Election to Sell, each guarantor or surety of the debt, NRS 107.095(1), and any person who recorded a request for a Notice of Default and Election to Sell. (NRS 107.090.
5. On the first day after the Notice of Default and Election to Sell is recorded and sent by mail to all interested parties, the borrower and the other obligors are then given 35 days to make good the deficiency in payment or performance. NRs 107.080(2)(a)(2). This essentially allows the borrower or other obligors to de-accelerate the default under the Deed of Trust and terminate the foreclosure proceedings.
6. In the event the borrower or other party in interest fails to cure the deficiency in payment or performance, the Trustee must wait until the expiration of three months following the recording of the Notice of Default and Election to Sell (55 days after the 35 day reinstatement period expires) before giving notice of the time and the place for the sale of the real property (NRS 107.080). The notice of the time and place for the sale of the real property must be published in accordance with Nevada’s execution statutes.

Requirements of Publication for the Notice Under Nevada Laws

Nevada statute requires the following publication of the notice of the date, time and place of the sale:
(1) Personal service or service by registered mail to the last known address of each person entitled to Notice of Default and Election to Sell;
(2) The posting of a similar notice particularly describing the property , for twenty days successively, in three public places of the township or city where the property is situated in or where the property is to be sold; and
(3) Publishing a copy of the Notice three times, once each week for three successive weeks, in a newspaper, if there is one the county. (NRS 21.130(c).
(4) In addition to the notice required by Nevada’s execution statutes, the Trustee is required to, at least twenty days before the date of the sale, deposit in the United States mail and envelope, registered or certified, return receipt requested and with postage prepaid, containing a copy of the Notice of time and place of sale, addressed to each person who has recorded a Request for Notice of Default and Sale. See NRS 107.090(4).
(5) If the Trustee fails to give any person liable to the beneficiary or any other person who has requested a Notice of Default and Sale the required notices, that person may be released of its obligation to the lender. NRs 107.095.
(6) NRs 107.080(4) allows the Trustee to conduct the sale at the Trustee’s office.
(7) At the foreclosure sale, the Trustee may sell the real property by public auction. Generally, the lender will provide the trustee with a minimum credit bid before the foreclosure sale. The amount of the credit bid may be for the full amount of the debt owed to the beneficiary or only a portion of what is owed to the beneficiary. Any person or entity may attend the foreclosure sale and bid for the real property.

What is Nevada’s “One Action Rule”?

Nevada has adopted a one-action rule. It provides that there may be only one action to collect a debt secured by a mortgage or other lien. The Nevada One Action rules provides: (NRs 40.430(1)-(3).
1. There may be but one action for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provision of this section and NRS 40.433 to 40.459, inclusive. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale or the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRs 40.462.
2. This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred.
3. A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

What is a Wrongful Foreclosure Action?

A wrongful foreclosure action is an action filed in superior court by the borrower against the servicer, the holder of the note, and usually the foreclosing trustee. The complaint usually alleges that there was an “illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust.” Munger v. Moore (1970) 11 Cal.App.3d. 1. The wrongful foreclosure action is often brought prior to the non-judicial foreclosure sale in order to delay the sale, but the action may also be brought after the non-judicial foreclosure sale.

A borrower in a wrongful foreclosure can allege that the amount stated as due and owing in the notice of default is incorrect for one or more of the following reasons:
- an incorrect interest rate adjustment,
- incorrect tax impound accounts,
- misapplied payments,
- a forbearance agreement which was not adhered to by the servicer, unnecessary forced place insurance,
- improper accounting for a confirmed chapter 11 or chapter 13 bankruptcy plan.
- Wrongful foreclosure actions are also brought when the servicers accept partial payments after initiation of the wrongful foreclosure process, then continue with the foreclosure.
- Companion allegations for emotional distress and punitive damages usually accompany any wrongful foreclosure action.
- Also, a loan modification process was initiated, but stopped in bad faith by your lender.
- Deceptive trade practice under Nevada Laws.
- Violations of TILA
- Violations of RESPA
- Violations of HOEPA.
- Contractual Breach
- Intentional infliction of emotional distress
- Negligent infliction of emotional distress
- Wrongful foreclosure
- Promissory Estoppel.
Damages available to a borrower in a wrongful foreclosure action are an amount sufficient to compensate for all detriment proximately caused by the servicer or trustee’s wrongful conduct. Damages are usually measured by value of the property at the time of the sale in excess of the mortgage and lien against the property. Munger v. Moore (1970) 11 Cal.App.3d. 1. Additionally, the borrower may also obtain damages for emotional distress in a wrongful foreclosure action. Young v. Bank of America (1983) 141 Cal.App.3d 108; Anderson v. Heart Federal Savings & Loan Assn. (1989) 208 Cal.App.3d. 202. Further, if the borrower can prove by clear and convincing evidence that the servicer or trustee was guilty of fraud, oppression or malice in its wrongful conduct, punitive damages may be awarded.

How Can a Wrongful Foreclosure Action Delay Recovery of the Security?

A wrongful foreclosure suit filed in District court will not necessarily delay a servicer’s recovery of its security. The companion filings to such a suit (notice of pending action, injunction and/or motion to consolidate) however can delay a servicer’s ultimate recovery. Delay caused by a wrongful foreclosure action can be anywhere from forty-five days to two years.

A notice of pending action (“lis pendens”) is the most common companion to a wrongful foreclosure action. A lis pendens is recorded in the county in which the real property security is located at the time the wrongful foreclosure action is filed. The only requirement for a lis pendens to be recorded is an attorney’s signature that the action which is being noticed actually involves a real property claim. The purpose of the lis pendens is to put all third parties on notice that the borrower and the servicer are litigating over the real property security. Once a lis pendens is recorded, no title insurance company will issue a title insurance policy unless and until the lis pendens is removed. Although the servicer may “bond around” the lis pendens without title insurance, the real property security is virtually inalienable.

While a lis pendens can be filed at any time in the foreclosure process, a borrower applies for an injunction prior to the foreclosure sale with the intent of keeping the foreclosure sale at bay until issues in the lawsuit are resolved. The lawsuit can take anywhere from ten to twenty-four months. Generally, an injunction will only be issued if it appears to the court that: (1) the borrower is entitled to the injunction; and (2) that if the injunction is not granted, the borrower will be subject to irreparable harm. Like an action to expunge a lis pendens, a borrower’s application for an injunction is essentially a “mini-trial” on the merits.

There are important issues which are considered in nearly all injunctive relief action applications is the amount due and owing on the note and deed of trust. Again, it is imperative in any injunctive hearing that the servicer provide a detailed analysis of the amount it contends is due and owing on the note and deed of trust at issue. Sometime it is not possible for your servicer and they are unable to provide a breakdown of the amounts due and owing on the note and deed of trust at issue. Again, sometime they only can provide insufficient information to refute the borrower’s allegations, it is likely the injunction will be issued. Now comes the question of producing a bond from the borrowers, and making timely payments. In many cases, judges make their own laws when they experience heart wrenching stories from the borrowers, and their sorrowful tales have a deeper impact upon the judges, the issue injunctions. Of course tough standards are required by Nevada judicial system in issuing these injunctions but sometime the judges issue minimal bonds and little or no debt service requirements. This worst case scenario translates into a servicer being unable to sell the security and receiving no payments on the underlying debt during the life of the lawsuit. In reality, judges are loath to modify an injunction after it is issued and prior to a decision on the merits. Once an injunction with little or no debt service or bond is in place, the wrongful foreclosure suit will be a long and expensive process because the borrower has lost all incentive for a quick resolution of the action.

Another way borrowers delay a servicer’s recovery of its security through a wrongful foreclosure action is by consolidating their wrongful foreclosure action with their unlawful detainer action. Asuncion v. Superior Court (1980) 108 Cal. App. 3d 141. The Asuncion case which is usually relied upon by borrowers for consolidation contains an egregious fact scenario including clear fraud in the inducement of the loan. Judges however, do not limit the application of Asuncion to cases where fraud is alleged by the borrower. In applying Asuncion, a court can allow the unlawful detainer suit to be consolidated with the wrongful foreclosure action if there is a mere similarity of issues in the cases.
If the borrowers plays all the cards tactfully the final disposition of the case can be delayed anywhere from ten months to two years.

Nevada law provides many unique procedural remedies which may be employed in battling a wrongful foreclosure action. Judicious use of these procedures by counsel and close coordination between counsel and client can lessen the pain of defending a wrongful foreclosure action.

Short Sale vs. Foreclosure


Of course both short sale and foreclosure are not appealing to my senses and I detest equally both of them, but here my likings are not in discussion: I have to make distinction between these two often quoted and touted remedies in this national crisis. It is actually a selection between the two lesser evils.

Short-Sale versus Foreclosure.

A short sale is just the opposite of a full sale. Let us say your home has an appraised value of $400,000, and you had placed your house on sale for quite some, and no offer comes, and endlessly waiting you get tired. You can tell the bank that heck with it, I want to just get out of it. The bank would plan along with your knowledgeable broker a sale which should be quick, non cumbersome and in which you would not see a penny coming to your pockets. Altogether it is called a Short Sale. It is not as damaging on your credit report as let us say a foreclosure is. Closely related to short sale, of course, a surrender of deed which I will discuss in another time. The lasting impact of a short sale would stay few years on your credit. You may have to report to IRS which is a tax question and need to be addressed to your tax consultants.

Few things you have to remember.

1. Banks would not allow a short sale if there is a second lien attached with it. A short sale is a compromise between you and the bank who is the lien holder of your first principal. A short sale would wipe out the junior interests and that means second lien holder or HELOC. They would not get anything, and they would not agree to short sale unless they get something out of it. Now there would be a fight between the first lien holder and the second lien holder. This fight of course is detrimental to your interest and can cause delay in the process. Also, there are many layers of approvals on various levels in the banks’ hierarchy and oligarchy.

2. You can compromise with the bank how it should be reported to you credit bureaus. Use it to your advantage.

3. A negotiated short sale would stop the bank for a deficiency judgement against you.

4. One problem, if there is a short sale and you declare bankruptcy right after it, it can be treated as a collusive transaction between you and the lender, and your other creditors can contest it and may invalidate it.

5. Of course the solution again lies with your knowledgeable attorney handling your issue.

6. The IRS has very complex tax consequences in a debt renegotiation, such as a short sale, or foreclosure, that are more detrimental for solvent taxpayers than those who are insolvent or bankrupt as each generates Cancellation of Debt Income.

7. A borrower who refinanced their home to take the cash out to buy another home, then let the first home go to foreclosure thinking they are getting off debt and obligation free, are living in a fools paradise. This practice can be stopped by the lender.

The first thing to establish is what the home’s basis is. The IRS definition for basis is your investment in the home for tax purposes. It usually starts with the cost to acquire the house. Adjusted basis is the increase or decrease in the original basis according to certain events. Increases to basis include but are not limited to improvements having a useful life of more than a year, assessments for local improvements, sales tax, the cost of extending utility lines to the home, legal fees such as the cost of defending or perfecting title, and zoning costs. Decreases to basis include but are not limited to depreciation, nontaxable corporate distributions, casualty and theft losses, easements, and rebates from the seller.

IRS Pub 551 Basis of Assets is a handy reference. Taxable gain or loss on a house is determined by the difference of the selling price/amount realized and its adjusted basis.

IRC 61(a)(12) CODI, Cancellation of Debt Income other than as a gift, creates taxable income to the debtor unless an exception applies. In a Short Sale, the lender issues a 1099-C to the IRS. In a Short Sale example of a home, whether it be primary, second home, or third home, A bought his home in Reno in November 2004 for $290,000. In November 2005, A refinanced to a new loan for $380,000. Unfortunately, today its Fair Market Value is $260,000. A can no longer make the payments due to his legal split with B, his spousal equivalent. In 2007 A sells the property through a Realtor who successfully negotiated a Short Sale of $120,000 loan reduction with A’s lender, so A walked away with no immediate out-of pocket loss. A has a $120,000 nondeductible loss (adjustment to basis) on his home. The $120,000 principal reduction is taxable income in 2007 to A. (rev. Rul. 82-202) It is reported as “Other Income” on Line 21 of the 1040. If A had bought with seller-financing, there is special rule IRC 108 (e) (5). If three conditions are met, the borrower reduces the property’s basis and does not recognize CODI.

The IRS treats a foreclosure as a sale or exchange from which the borrower may realize gain or loss. In a foreclosure, the lender issues a 1099-A to the IRS. In a recourse state such as Nevada, the lender checks Box 5 as “Yes.” The borrower is personally liable to pay any amount of the debt not covered by the property’s value. The amount realized for borrower’s Federal gain or loss on the transaction is the smaller of debt cancelled or FMV of the transferred property. The borrower’s CODI is ordinary income if the loan balance exceeds the property’s FMV. If A had gone to foreclosure, his adjusted basis is $290,000, the recourse debt cancelled is $380,000 and the FMV of the property is $260,000. Here he realizes $260,000. The cancelled debt ($380,000) up to the property’s FMV ($260,000). Compare amount ($260,000) realized with adjusted basis ($290,000). A has a $30,000 non-deductible loss. He also recognizes ordinary income equal to the CODI of $120,000 ($380,000 debt cancelled less $260,000 FMV). This $120,000 is the part of the cancelled debt not included in the amount realized.

In a short sale example of a rental house, if A had bought and used the house as a rental, if A is not insolvent or bankrupt, if A can meet the required extent of his involvement, A can elect on Form 982 to exclude from gross income any income from the discharge of QRPBD (Qualified Real Property Business Debt). IRC 108(c)(3) QRPBD includes debt 1) that was incurred or assumed in connection with real property used in trade or business and that is secured by such real property, 2) debt incurred or assumed to acquire, construct, reconstruct, or substantially improve real property used in a trade or business. IRC 108(c)(1) Income excluded for the discharge of QRPBD reduces the basis of the taxpayers depreciable real property, first to the property with the discharged debt, then to the taxpayer’s other depreciable real property proportionally, on each property’s relative adjusted basis

NY Man Convicted in Mortgage Fraud


New York Developer Pleads Guilty To Mortgage Investment Scheme
Michael Hershkowitz, 52, New York, New York, a Manhattan real estate developer, pleaded guilty in Manhattan federal court to participating in a $27 million mail and wire fraud conspiracy.
Hershkowitz, working through Manhattan real estate development company, The Kingsland Group, Inc., and related entities, fraudulently induced approximately 70 individuals to lend the Kingsland Group over $27 million, purportedly to fund the renovation of approximately sixteen multi-family apartment buildings located in upper Manhattan.

Hershkowitz and a co-conspirator, Ivy Woolf-Turk, 52, Port Washington, New York, falsely represented that the lenders would hold, as collateral for the loans, interests in bona fide first mortgages in the various properties in which they thought they were investing. In fact, the lenders did not hold recorded, first mortgages in the properties. Instead, the lenders were provided with forged documents falsely reflecting that the mortgages had been properly recorded with the City of New York. Interest was paid on the loans for some years after they were first made, but ultimately the principal on the loans was not repaid when due and it was determined that the lenders did not have valid first mortgages on the properties in question.

Hershkowitz pleaded guilty before United States District Judge P. Kevin Castel to a one count Information charging conspiracy to commit mail and wire fraud — a charge which carries a maximum term of 20 years in prison. The Information also contains a forfeiture allegation for over $27 million, representing the funds obtained through the fraud. Hershkowitz is scheduled to be sentenced on September 9, 2009.

Lev L. Dassin, Acting United States Attorney for the Southern District of New York, made the announcement.

Mr. Dassin praised the investigative work of the Federal Bureau of Investigation in this case.

This investigation is being handled by the Major Crimes Unit of the United States Attorney’s Office. Assistant United States Attorneys Harry A. Chernoff and Marcus A. Asner are in charge of the prosecution.