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Archive for August, 2009

Robert Noggle,  attorney with Black Lobello law firm,  explains the new Nevada Deficiency Law that takes effect on October 1, 2009 in this guest contributor post.

“Change to Nevada Law prohibits deficiency judgments for loans made after October 1, 2009 to purchase primary residences.”

Nevada currently provides for the right of a foreclosing lender on real estate to pursue a deficiency judgment against the borrower on any type of property including a primary residence.  Nevada is known as a full recourse state.  The law provides for a six month period following the trustee’s sale in which the lender may file an action against the borrower to recover amounts owing.

NV_Law_Deficiency_JudgmentsEffective October 1, 2009, Nevada becomes a limited recourse state similar to California.  Loans made after October 1, 2009; by a financial institution to a borrower who continuously occupies the property as a primary residence are nonrecourse.  This means that the lender may not pursue a foreclosed borrower to recover a deficiency.  Although some may consider this the equivalent of sending life boats and vests to the Titanic days after the sinking, it is a significant development in Nevada real estate law.

For the new law to apply the following requirements must be met:

  1. The real property is a single-family residence;
  2. The loan was used to buy the property;
  3. The borrower continuously occupied the property as a principal residence after the loan was made;
  4. The original loan was not refinanced;
  5. The loan was made by a financial institution.

mediationThe mandatory mediation program will have an impact on our market as 80% of all home sales in Las Vegas are foreclosed homes. I think one of the most clear and concise explanation of this new federal law is written by a local attorney who specializes  in real estate law, Robert Noggle. He has graciously contributed the following article.

A new Nevada law allowing any homeowner receiving a notice of default from their lender to request mandatory mediation with that lender becomes effective on July 1st.

The purpose of the mediation program is to avoid a foreclosure by providing a forum for home owner and lender to negotiate a loan modification including a short sale.

The most important development is that the lender must be represented at the mediation hearing by a representative who has authority to modify the loan or who has telephone access to someone with such authority.  The lender’s failure to do so may result in the mediator modifying the loan.  Proposed court rules for the program allow a lender to participate by telephone if approved by the mediator.

The mediation is nonbinding.  The lender retains complete discretion as to whether to modify the loan and, if so, on what terms.  However, a trustee’s sale of the home may not occur until the mediation is completed.  The trustee’s sale is the final step in the foreclosure process.  As a general practice the lender makes the winning bid at the sale and becomes the owner of the home.

The cost of the mediation is $400 divided equally between the homeowner and the lender. According to the proposed rules the maximum period of time allotted to a mediation session is four hours.  The homeowner must provide a financial statement together with a Housing Affordability Worksheet.  The lender must provide a certified copy or original of the Deed of Trust and promissory note together with a copy of each assignment of the note and deed of trust.

The lender’s failure to provide the required documents may result in sanctions. The lender may also provide an estimate of the short sale value of the property if the loan cannot be modified.

Under the proposed rules the mediation must take place within 90 days of the filing of the notice of default. By law the foreclosure process can take no less than 111 days from the filing of the notice of  default to the sale.  The mediation program is mandatory at the homeowner’s request if the Notice of Default was filed July 1 or thereafter.  The parties may stipulate to mediation if the notice of default was recorded prior to July 1.

Final mediation rules will be issued in the near future.  However, as a new program there are many unanswered questions as to how effective the program will be.  Whether lenders will participate in good faith to avoid foreclosures is unknown.

Based upon cases from around the country a lender’s ability to provide the necessary documentation including copies of all assignments could be a serious challenge for them.  For the homeowner the ability to present a case for a loan modification will depend upon their ability to make their numbers work so as to persuade the lender of their ability to make future modified payments.

By: Robert B. Noggle, Attorney
Black & LoBello

Robert B. Noggle may be contacted at (702) 869-8801 or rnoggle@blacklobellolaw.com.  For more information visit www.blacklobellolaw.com

On July 8, 2009, Governor Jim Gibbons signed emergency regulations that require all persons conducting loan modification and foreclosure consulting activities to have state licenses.

The emergency regulations are effective immediately.  The Governors act was authorized by Assembly Bill 152, which was passed in the last Legislative Session.  AB 152 modified Nevada Revised Statute 645F, and required the Commissioner of Mortgage Lending to adopt regulations to license the loan modification and foreclosure consulting companies.  The emergency regulations were promulgated recently and the Governors signature made them effective.

In  addition to the license, loan modification and foreclosure consultants now must follow specific operating rules and regulations.

Read the rest of this blog post at the Black & Lobello Blog:

Is your loan modifiction company licensed in Nevada?

Categories : Loan Modifications
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Home Forclosure SignWe compiled this list of useful online resources to learn more about avoiding foreclosure,loan modifications, and short sales.

Avoid Foreclosure – Help, Information and Resource Sites:

Nevada Foreclosure Help and Resources

Notice of ForeclosureThe Foreclosure Process in the state of Nevada typically takes about 6 months from the time the Notice of Default is filed to the Eviction of the homeowner.

  • Notice of Default starts the foreclosure process – it is prepared, recorded, mailed, posted, published and a copy sent to all parties (owner, all lenders, IRS, local, state, and federal tax agencies) who have an interest in the property.
  • Reinstatement Period (month 1) – starts on the first day the notice of default is recorded. This is a 35 day period in which the homeowner can reinstate the loan by making any back payments, foreclosure fees and other allowable expenses.
  • Redemption Period (months 2-3) – starts on day 36 from the recorded date of the Notice of Default. Now the homeowner is now responsible for paying the remaining loan balance along with all foreclosure fees and other allowable expenses. It should also be noted that approximately 10 days before the end of the redemption period, the trustee will notify the lender for permission to prepare the Notice of Trustee Sale for publication.
  • Publication Period (month 4) -  means the Notice of Sale must be published once a week for three consecutive weeks (21 days) prior to the Trustee Sale.
  • Trustee Sale (month 5 ) is the final step in the foreclosure process and it is extremely important to remember the homeowner has no right of redemption after the sale is finalized. If there is a successful bidder at the sale, the new owner will purchase the property in “as is” condition with no warranties. If there are no bidders at the sale, the lender becomes the sole owner as an REO (Real Estate Owned).
  • Eviction (month 6) process starts after the Trustee Sale is finalized. The eviction process is initiated by posting a 3 day Notice to Quit on the property. If there is no response, the new owner will file a 5 day Eviction Notice with the court. If there is no response by 5pm on the 5th day, the Constable will evict the resident.

Additional Resources:

Contact the Short Sale Professionals


Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale?

Contact us for a free consultation regarding your options – there are solutions!
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