Don’t get caught off guard if you're facing a potential foreclosure in Nevada. Read on to find out each step in a Nevada foreclosure—from missing your first payment all the way to eviction—and learn about your rights during the process.
When you take out a loan to purchase residential property in Nevada, you'll likely sign a promissory note and a deed of trust. A promissory note is basically an IOU that contains the promise to repay the loan and the terms for repayment. The deed of trust provides security for the debt that's evidenced by a promissory note. If you fail to make the payments, the deed of trust gives the lender the right to sell the home so it can recoup the money it loaned you.
If you miss a payment, most loans include a grace period of ten or fifteen days, after which time the loan servicer will assess a late fee. The late fee is generally around 5% of the overdue payment of principal and interest based on the note's terms. To find out the late charge amount and grace period for your loan, look at the promissory note you signed. This information is also on your monthly mortgage statement.
If you miss a few mortgage payments, your servicer will probably send a letter or two reminding you to get caught up and call you to try to collect the payments. Don’t ignore the phone calls and letters. This preforeclosure period presents a good opportunity to discuss loss mitigation (foreclosure avoidance) options and attempt to work out an agreement, like a loan modification, forbearance, or repayment plan.
Under federal laws that went into effect January 10, 2014, the servicer normally must wait until you're 120 days delinquent on payments before making the first official notice or filing for any nonjudicial or judicial foreclosure. This 120-day period should give you sufficient time to explore loss mitigation opportunities.
At least 30 calendar days before officially starting a foreclosure and at least 30 calendar days after the default, the servicer or owner of the loan has to send you (the borrower) a notice that contains information about the account. The notice must include the total amount needed to cure the default and information about foreclosure prevention alternatives, among other things. (Nev. Rev. Stat. § 107.500).
The Nevada nonjudicial foreclosure process formally begins when the trustee, a third-party, records a Notice of Default and Election to Sell (NOD) in the office of the recorder in the county where the property is located, providing three months to cure the default. (Nev. Rev. Stat. § 107.080).
Mailing requirements. A copy of the NOD must be sent to each person who has a recorded request for a copy and each person with an interest or claimed interest in the property by registered or certified mail within ten days after the NOD is recorded. (Nev. Rev. Stat. § 107.090).
Posting requirements. If a residential foreclosure, a copy of the NOD must be posted on the property. (Nev. Rev. Stat. § 107.087).
Affidavit requirement. The trustee or beneficiary (lender) must record a notarized affidavit along with the NOD that states, based on a review of business records, including all of the following information.
Nevada law requires that borrowers in foreclosure get the option to participate in mediation if the property is owner-occupied. (Nev. Rev. Stat § 107.086).
At least 60 days prior to the sale date, the trustee must provide the borrower with a separate “Danger Notice” stating that they are in danger of losing their home to foreclosure, along with a copy of the original promissory note.
The notice must be:
After expiration of the three-month period following the NOD recording, the trustee must give notice of the time and place of the sale by recording the notice of sale and by:
A separate notice for tenants must be posted in a conspicuous place on the property and mailed. (Nev. Rev. Stat. § 107.087).
For owner-occupied housing, the borrower gets a right to reinstate by paying the arrearage, costs, and fees. This right expires five days prior to the date of the foreclosure sale. (Nev. Rev. Stat. § 107.0805).
At the foreclosure sale, the property will be:
In a foreclosure, the total debt that the borrower owes sometimes exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a “deficiency.” In some states, the lender can seek a personal judgment, called a "deficiency judgment," against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount from the borrower.
In Nevada, a lender may obtain a deficiency judgment following a foreclosure sale if it files the suit within six months. But the amount of the judgment is limited to the lesser of:
For loans taken out after October 1, 2009, deficiencies are prohibited for purchase money loans (that have not been refinanced) held by a bank or other financial institution on single-family residences owned by the borrower at the time of the foreclosure sale, which have been occupied continuously by the borrower since taking out the loan. (Nev. Rev. Stat. § 40.455). (Find out more about Deficiency Judgments After Foreclosure in Nevada.)
Some states give foreclosed borrowers a post-sale redemption period during which they can pay off the total debt or reimburse the purchaser from the foreclosure sale to reclaim the property. However, Nevada law doesn't provide a redemption period following a nonjudicial foreclosure sale. (Nev. Rev. Stat. § 107.080).
If you, a foreclosed homeowner, don't vacate the property following the foreclosure sale, the new owner will likely:
Tenants receive some protection from eviction under the federal Protecting Tenants at Foreclosure Act.
This article contains details on foreclosure laws in Nevada, with citations to statutes so you can learn more. Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney if you’re facing a foreclosure.
If you have questions about Nevada's foreclosure process or want to learn about potential defenses to a foreclosure, consider talking to a foreclosure attorney. It’s also a good idea to talk to a HUD-approved housing counselor if you want to learn about different loss mitigation options.