Foreclosure Mediation in Nevada

For some, a home or a house may just be a piece of property but for you it could be more than just that.  Homeownership could be a token of your achievement and hard work, a constant reminder of how you should keep on working hard, a memorabilia of the family that you established, your life story, or could simply just be your life.  Unlike any other important things in life, getting a house entails a large sum of money to be able to call it your own. 

Your option to making this dream come true is to borrow money from a lender or a bank. Much that you are too focused on fulfilling your dream that you tend to overlook the real deal of borrowing a sum of money just to own a home.

What is Foreclosure?

Not everyone is lucky to buy a home with cash on hand ready to be disposed of for the purchase of a house.  Typically, you were able to save up some amount to cover up for the property’s downpayment and leave the rest to be covered by a loan which you will have to pay monthly.  A house loan will give you the flexibility to live in your dream house, at the same time paying attention to your and your family’s other needs with the payment terms being affordable.

However, tough times come unexpectedly and you would miss paying the monthly loan payments, worst, you wouldn’t be able to continue paying for it.  You shudder at the thought that your home would be taken by the bank or the lender from which you owed money – the sudden fear of foreclosure or repossession of your house sets in. Mortgage foreclosure is a legal procedure that enables the lender to regain the money he/she is owed for a defaulted loan by seizing and selling the mortgaged property.  The process typically starts when you missed payments for months or if you have failed to meet the other terms and conditions set out in your mortgage document.  When this happens, the lender could sell off your property to pay off the amount owed to him/her.

It is important to know that foreclosure laws vary by state.  Nevada recognizes the importance of a house in your life, therefore, does not treat it as just a piece of property.  This somehow gives you hope of keeping your home.

What are the Types of Foreclosure?

It is good to understand the 3 types of foreclosures as follows:

  • Judicial Foreclosure:  In this type of foreclosure, the lender goes to court to file a suit to start the foreclosure process.  This typically happens when you miss out your third consecutive month mortgage payment.  A letter will be sent to you indicating that foreclosure will start if you do not bring the loan current within 30 days.  However, you have to note the time limit depends on the state.  All states allow this foreclosure type, and it is mandated in some.  Your property would be sold at an auction conducted by a court or sheriff’s office if you fail to make payment on time.
  • Non-judicial Foreclosure or Power of Sale:  This is also known as Statutory Foreclosure, and authorized in states where the mortgage contract includes a “power of sale” clause. In this type of foreclosure, your lender does not go to court to foreclose or sell your home. This type of foreclosure is mandated in Nevada.
    The process begins when your lender sends through mail and records a Notice of Default or Breach and Election to Sell should you fail to make payments on your loan.  This notice serves as indication that the foreclosure process has begun, and you have 4 months to work it out with your lender to save your property from a foreclosure sale.
  • Strict Foreclosure:  This type of foreclosure normally happens when the outstanding debt amount exceeds the value of the property.  The lender files a suit against you, who is in default, in court.  If you fail to pay on a specified time given by the court, the title of your property is transferred directly to the lender without requiring any sale.  This foreclosure is allowed only in the states of Vermont and Connecticut.

How Would I Know if Foreclosure Proceeding had Started Against Me?

You would know if a foreclosure proceeding had started against you when you receive via registered or certified mail a Notice of Default that would be recorded against your property.  This notice comes in your mail with your return receipt to you as homeowner and each guarantor or surety to the mortgage.

The Notice of Default must describe and contain the contact details of:

  • The person with the authority to negotiate  a loan modification;
  • The Foreclosure Mediation Program; and
  • At least one Department of Housing and Urban Development (HUD) approved housing counseling agency you can contact for assistance.The said Notice should also be posted on your property within 3 days of recording.  This policy holds true for all single family residences or small complexes that have 4 or less units as long as one unit is where you live.

The said Notice should also be posted on your property within 3 days of recording.  This policy holds true for all single family residences or small complexes that have 4 or less units as long as one unit is where you live.

When Can a Lender Record the Notice of Default and Election to Sell?

A waiting period of at least 30 days after you fail to pay your first mortgage due is given before your lender can send you a letter telling you of his rights to foreclose on your property, which also includes a list of alternatives to foreclosure.  Should you not take care of the delinquency in the next 90 days, the lender can record a Notice of Default.  In addition, under the Consumer Financial Protection Bureau’s guidelines, the Notice of Default can only be filed 120 days after you default.

How Can I Possibly Avoid Foreclosure Despite Payment Delinquency?

There are several options to avoid foreclosure knowing that you are already behind your payment to your lender with whom you owe money to buy your house.  The ultimate solution to end your foreclosure fears is to pay your past dues in lump sum.  This option could definitely be impossible since you know you don’t have the resources to do so, the very reason you fall behind your dues. Below are some other ways that can help you ease the burden of the foreclosure process may bring you, if not avoid it.

How Important is Mediation?

Despite the reality of a probable foreclosure, you have to understand that it is not the end of the road for you. It is during mediation when you and your lender will have the opportunity to meet and discuss your other options for foreclosure.  It is compulsory that your lender sends you via mail an Enrollment Mediation form when the Notice of Default is mailed to you.  Once you completed the Enrollment in Mediation form and submit a non-refundable amount of $200 fee to the State of Nevada Foreclosure Mediation Program, mediation automatically becomes mandatory for your lender.  Your lender, on the other hand, also pays a fee of $200.  The total fee of $400 goes to the mediator. Before a mediator, you and your lender will discuss possible ways on how to avoid or lessen the severity of the circumstances foreclosure can bring to you.  You have to understand that mediation requires good faith on your part and that of your lender but should not be an excuse for you to delay the foreclosure sale.

It is important to note that mediation applies to Nevada residential properties that are occupied by the owners and the primary residence as well.

It is important to note that mediation applies to Nevada residential properties that are occupied by the owners and the primary residence as well.

What is the Role of a Mediator in the Foreclosure Process?

The role of the mediator in mediation is essential.  He/She is a neutral third party who helps you and your lender to agree on a negotiated consensus. 

What Other Documentation Requirements Would I Need for Mediation?

Typically, the requirements that would be needed from you and that which you need to prepare are the documents the lender requires from you.  These documents will serve as basis for evaluation of your loan modification. 

During the mediation, you should be able to show evidence of the following to be able to work something out at mediation:

  • A steady income or a prospect of a steady income in the near future; and
  • You would be willing to give up your home and want more time/or money to move.

What Documents are Required of the Lender at Mediation?

Since mediation will have to be attended by you and your lender, foreclosure trustee, servicer, or other representative (whoever shows up as representative of the bank), your lender will also have to be required to prepare and submit certain documents to the mediator, and copies of which will also be provided to you before mediation.  These documents include:

  • An appraisal which is no more than 60 days old;
  • An estimate of the short sale value of your property;
  • A non-binding proposal to resolve the foreclosure; and
  • An original copy or a certified true copy of the following:
    – Deed of Trust,
    – Assignment of the Deed of Trust,
    – The Note, and
    – Each endorsement of the Note.

In cases where the originals of the said documents are lost or destroyed, the mediator can accept a court order to enforce a lost, destroyed, or stolen instrument.  If your lender could not produce and submit originals or certified true copies of the required documents, a penalty could be imposed in sanctions, which may include a one-sided modification of the loan. Also, the mediator could not certify mediation as complete, and the Foreclosure Mediation Program would not issue the certificate allowing the bank to proceed with the foreclosure.  With this, the parties would have to file a petition in court to proceed with the foreclosure or seek sanctions.  Time is of essence here because there is a specific time for filing the petition seeking for judicial review of the mediation, which should be within 30 days after you receive the Mediator’s Statement from mediation. Should your lender fail to bring the required documents in mediation and does not file a petition for judicial review, it must cancel its Notice of Default and start the process all over by recording a new Notice of Default, and starting all over may take 6 months to 1 year for the bank.  It is only when a new Notice of Default is recorded that you, as homeowner, could enroll in mediation again.

Why Is There a Foreclosure Trustee and What is His/Her Role in the Foreclosure?

A foreclosure trustee is a third party who manages the foreclosure process and works with your lender, who chooses him/her, as most often he/she is closely associated with your lender or your lender’s attorney.

As the foreclosure trustee is on the side of your lender, he/she typically looks out for the interests of your lender.

What Happens if I Wouldn’t Want to Take Part in Mediation?

As homeowner, you have the right to go for mediation or choose to waive mediation.  Having chosen this option to waive, here are the things that you need to know:

  • The foreclosure trustee should apply for a certificate that no mediation is required from the Foreclosure Mediation Program Administrator by filling out and submitting the Trustee’s Affidavit;
  • Upon receipt of the certificate that no mediation is required from the Foreclosure Mediation Program, the certificate is recorded by the trustee and sent to you; and
  • If you could not respond to the notice advising of the right to request mediation within 30 days, it is then that the foreclosure trustee should obtain the certificate that no mediation is required to be able to proceed with the foreclosure sale.  This means that the trustee could issue the Notice of Sale 3 months after recording the Notice of Default.

What Should I Do if I Do Not Agree with the Mediation Outcome?

You or your lender can always file for a Petition for Judicial Review within 30 days of the receipt of the mediator’s statement if any of you is dissatisfied with the mediation outcome. Said petition should be filed with the District Court in the county where the Notice of Default was recorded.

Will Mediation Help Me Keep My Home?

Attending foreclosure does not guarantee that both parties will agree on something workable, and that you can keep your home, but it would somehow keep your eyes open to options that you might have not considered but your lender might have thought of.

In one way or the other, foreclosure mediation could somehow make you keep your home for a while as foreclosure stops during the mediation process.

Freedom Law is Here to Help

The threat of losing your home to foreclosure is stressful.  The thought of causing you and your family the burden of not having a roof on top of your heads makes you feel vulnerable and such vulnerability could trigger more issues and decisions that are unreasonable.  Let us help you qualify your fears and allow us to work with you in your foreclosure ordeal.

Freedom Law is ready to help.  Please request a call-back by submitting a short online form. All initial consultations are free and confidential. 

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