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 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.

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.

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.