Don’t be 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.
(If you're about to go through a foreclosure in Nevada, you might be able to save your home with assistance from the state's Hardest Hit Fund program.)
When you take out a loan to purchase residential property in Nevada, you will 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, as well as the terms for repayment. The deed of trust provides security for the loan that is evidenced by a promissory note.
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 terms of the note.
To find out the late charge amount and grace period for your loan, look at the promissory note that you signed. This information can also be found on your monthly mortgage statement. (Learn more about fees the servicer lender can charge if you’re late on mortgage payments).
If you miss a few mortgage payments, your mortgage servicer will probably send a letter or two reminding you to get caught up, as well as call you to try to collect the payments. Don’t ignore the phone calls and letters. This is a good opportunity to discuss loss mitigation (foreclosure avoidance) options and attempt to work out an agreement, like a loan modification, forbearance, or payment plan.
Under federal laws that went into effect January 10, 2014, the servicer normally must wait until you are 120 days delinquent on payments before making the first official notice or filing for any nonjudicial or judicial foreclosure. This is to give you sufficient time to explore loss mitigation opportunities. (Learn more about when a foreclosure can start.)
Nevada law requires the servicer or owner of the loan to send the borrower a notice that contains information about the account, including the total amount needed to cure the default, and includes information about foreclosure prevention alternatives, among other things. (Nev. Rev. Stat. § 107.500).
In Nevada, most residential foreclosures are nonjudicial. This means the lender can foreclose without going to court as long as the deed of trust contains a power of sale clause. (For more information about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?)
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 who are in foreclosure be given the option to participate in mediation if the property is owner-occupied. (Nev. Rev. Stat § 107.086).
At least 60 days prior to the date of the sale, the trustee must provide the borrower(s) 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 recording of the NOD, 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).
In the case of owner-occupied housing, the borrower gets a right to reinstate by paying the arrearage, costs, and fees. This right expires 5 days prior to the date of the foreclosure sale. (Nev. Rev. Stat. § 107.0805).
At the foreclosure sale, the property will be:
When a lender forecloses on a mortgage, the total debt owed by the borrower to the lender frequently 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 foreclosure, 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 borrowers at the time of the foreclosure sale, which have been occupied continuously by the borrowers 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 in order to reclaim the property. In Nevada, there is no redemption period following a nonjudicial foreclosure sale.
If you, a foreclosed homeowner, don't vacate the property following the foreclosure sale, the new owner will likely:
If you have questions about the foreclosure process in Nevada 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.