1. Missed Payments and Notice of Default:

Foreclosure proceedings typically begin after a borrower has missed several mortgage payments (usually three to six payments). The lender will send a notice
of default (NOD), giving the borrower a chance to resolve the delinquency.

 

2.  Pre-Foreclosure Period:

After the notice of default is issued, there is a pre-foreclosure period during which the borrower can either pay the overdue amount to bring the mortgage current, negotiate a modification or repayment plan with the lender, or sell the property (often in a short sale to avoid foreclosure). This period varies by state but can last from 30 to 120 days. 

 

3.  Notice of Trustee's Sale:

If the borrower cannot resolve the default, the lender may then issue a notice of trustee's sale (in non-judicial foreclosure states) or file a lawsuit (in judicial foreclosure states). This notice will set a date for the foreclosure auction. The timeline for this notice can vary, but it typically occurs a few months after the notice of default.

 

4.  Foreclosure Auction: 

If the borrower cannot resolve the default, the lender may then issue a notice of trustee's sale (in non-judicial foreclosure states) or file a lawsuit (in judicial foreclosure states). This notice will set a date for the foreclosure auction. The timeline for this notice can vary, but it typically occurs a few months after the notice of default. 

 

5.  Post-Foreclosure:

If the property is not sold at auction, it becomes the property of the lender (now known as REO, or real estate owned). At this point, the previous homeowner must vacate the property if they haven't already.

 

6.  Eviction:

The final step, if necessary, is eviction. This can happen quickly or may take several weeks, depending on local laws and the court system. 

Nevada Foreclosure Laws & Procedures 

 

How does the Nevada foreclosure process work? Find out about Nevada's foreclosure laws here. 

Prior to the foreclosure crisis, federal and state regulations concerning mortgage servicers and foreclosure procedures were fairly minimal and generally favored lenders conducting the foreclosures. However, more recently, numerous federal and state laws have been established to provide protections for borrowers. Typically, servicers are now required to offer borrowers opportunities for loss mitigation, meticulously document each step of the foreclosure process, and adhere strictly to foreclosure laws. Additionally, the majority of individuals who secure a loan to purchase residential property in Nevada sign a promissory note and a deed of trust, which is comparable to a mortgage. These documents grant homeowners certain contractual rights alongside federal and state legal safeguards. Therefore, if you're a Nevada homeowner who has fallen behind on mortgage payments, it’s crucial not to be caught unprepared. Familiarize yourself with Nevada's foreclosure laws and procedures, starting from missing your initial payment to the point of a foreclosure sale. 

What Are My Rights During Foreclosure in Nevada?

 

In a Nevada foreclosure, you'll most likely get the right to:

- receive preforeclosure notice
- apply for loss mitigation
- receive certain foreclosure notices
- get current on the loan and stop the foreclosure sale
- receive special protections if you're in the military
- pay off the loan to prevent a foreclosure sale
- file for bankruptcy, and
- get any excess money after a foreclosure sale.

Once you understand the Nevada foreclosure process and your rights, you can make the most of your situation and, hopefully, work out a way to save your home or at least get through the process with as little anxiety as possible.

 

What Is Preforeclosure?

The time span after you fall behind on payments, but before a foreclosure officially begins, is typically referred to as the "preforeclosure" stage. (Occasionally, people also use "preforeclosure" to describe the period leading up to a foreclosure sale.)

 

During this time, the servicer can charge you various fees, including late and inspection fees, and, in most cases, must let you know how to avoid foreclosure, and send you a breach letter.

 

What Is the Nevada Homeowner's Bill of Rights?

Nevada Homeowner's Bill of Rights, providing protections for borrowers similar to federal law, safeguards borrowers facing potential foreclosure in Nevada.   (Nev. Rev. Stat. §§ 107.400 and following).

 

Notice to Distressed Borrowers Under Nevada's Homeowner's Bill of Rights

The servicer is required to provide the borrower with a written notice containing various details at least 30 calendar days before recording a Notice of Default or initiating a judicial foreclosure action, and at least 30 calendar days following the borrower's default.

 

- a summary of the borrower's account, including information related to the loan, such as the total amount needed to cure the default, the principal balance, the date of the last payment, and contact information to inquire about the loan
- information about available foreclosure prevention alternatives
- contact information for housing counseling agencies

Servicer Must Reach Out to Distressed Borrowers

 

To discuss the borrower's financial situation and explore options to avoid foreclosure, the servicer must contact the borrower either in person or by telephone 30 days before initiating foreclosure. If the servicer is unable to reach the borrower, it may still proceed with foreclosure, provided it complies with specific calling and mailing requirements. (Nev. Rev. Stat. § 107.510).

 

No Dual Tracking Under Nevada's Homeowner's Bill of Rights

When the borrower submits a complete loss mitigation application, the foreclosure process is put on hold while the loan servicer reviews the application and makes a decision. The servicer is required to decide on the approval or denial of loss mitigation within 30 days of receiving the complete application, as stipulated by Nevada Revised Statutes § 107.530.
 
Even if the lender denies the loss m (Nev. Rev. Stat. § 107.530).

 

Single Point of Contact Requirement

Under the Nevada Homeowner's Bill of Rights, the servicer must establish a single point of contact whose responsibilities include:

 

- communicating with the borrower about the process of obtaining a foreclosure prevention alternative

- coordinating the receipt of all documentation needed to complete a loss mitigation application

- informing the borrower of the status of the application

- ensuring the borrower is considered for all foreclosure alternatives, and

- contacting the person with the ability and authority to stop the foreclosure process when necessary.

 

The contact person remains assigned to the account until all loss mitigation options are exhausted or until the borrower brings the account current. (Nev. Rev. Stat. § 107.540).

 

Applicability of Nevada's Homeowner's Bill of Rights

The Nevada Homeowner's Bill of Rights protections generally apply to first mortgage loans for properties that are residential and owner-occupied. (Nev. Rev. Stat. § 107.450). But the protections don't apply to borrowers who have:

- surrendered the property as evidenced by a letter confirming the surrender or the delivery of keys to the property to the lender or

- filed bankruptcy, and the bankruptcy court has not dismissed the case or granted relief from the bankruptcy stay. (Nev. Rev. Stat. § 107.410).

 

When Can a Foreclosure Start in Nevada?

Under federal law, the servicer usually can't start a foreclosure until the borrower is over 120 days delinquent on payments, subject to a few exceptions. (12 C.F.R. § 1024.41).

Which Type of Foreclosure Is Permitted in Nevada?

If you default on your mortgage payments in Nevada, the lender may foreclose using a judicial or nonjudicial method.

 

How Judicial Foreclosures Work

A judicial foreclosure starts when the lender submits a lawsuit requesting a court order to permit a foreclosures sale. Should you fail to respond with a written answer, the lender will automatically prevail in the case. However, if you decide to contest the foreclosure lawsuit, the court will evaluate the evidence and decide the outcome. Should the lender win, the judge will issue a judgment and mandate that your home be sold at auction.

 

How Nonjudicial Foreclosures Work 

A nonjudicial foreclosure, also referred to as a "statutory foreclosure," involves following the specific procedures outlined by state law. In this type of foreclosure, the lender carries out the steps prescribed by state statutes without court intervention. Once these steps are completed, the lender can proceed to sell the home at a foreclosure sale.

 

Most lenders prefer the nonjudicial process because it is faster and less expensive compared to resolving the issue in court.

 

What Are the Steps Involved in the Nevada Nonjudicial Foreclosure Process?

Again, most residential foreclosures in Nevada are nonjudicial. Here's how the process works.

 

Preforeclosure Notice Under Nevada Law

The Nevada Homeowner's Bill of Rights mandates that a notice with specific details about the account must be sent to you, the borrower, at least 30 calendar days before initiating a foreclosure and at least 30 calendar days after defaulting. This notice should outline the total amount required to remedy the default and provide information on foreclosure prevention options, among other pertinent details. (Nev. Rev. Stat. § 107.500).

 

This information might be included as part of the breach letter.

 

Notice of Default and Election to Sell

The Nevada nonjudicial foreclosure procedure officially starts when the trustee files a Notice of Default and Election to Sell (NOD) with the county recorder's office where the property is situated, allowing three months to rectify the default. (Nev. Rev. Stat. § 107.080

 

 

Mailing Requirements

A copy of the NOD must be sent to each person with 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

For a residential foreclosure, a copy of the NOD must be posted on the property 100 days before the sale. (Nev. Rev. Stat. § 107.087).

 

Affidavit Requirement

The trustee or beneficiary (lender) must record a notarized affidavit along with the NOD that gives, based on a review of business records, information about the trustee, loan, and loan owner. (Nev. Rev. Stat. § 107.0805).

Foreclosure Mediation In Nevada

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).

 

Danger Notice

At least 60 days before the sale date, the trustee must provide the borrower with a separate "Danger Notice" stating that they're in danger of losing their home to foreclosure, along with a copy of the original promissory note.

For owner-occupied housing, the notice must be:

 

- personally served to the borrower

 

- left with a person of suitable age and discretion (if the borrower is not available) and a copy mailed, or

 

- if a person of suitable age and discretion is not available, then the notice may be posted in a conspicuous place on the property, left with a person residing in the property, and then mailed to the borrower. (Nev. Rev. Stat § 107.085).

 

Notice of Sale

After the expiration of the three months 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:

 

- providing the notice of sale to each required party by personal service or by mailing the notice by registered or certified mail to the last known address 20 days before sale

 

- posting the notice of sale on the property 15 days before the sale

 

- posting the notice of sale for 20 days successively in a public place in the county where the property is situated, and

 

- publishing a copy of the notice of sale three times, once each week for three consecutive weeks, in a newspaper of general circulation in the county where the property is situated. (Nev. Rev. Stat § 107.080, § 107.087, § 107.090.)

 

How Do Foreclosure Sales in Nevada Work?

At the sale, the lender usually makes a credit bid. The lender can bid up to the total amount owed, including fees and costs, or it may bid less.

 

In some states, including Nevada, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower, subject to some limitations (see below).

 

The property becomes "Real Estate Owned" (REO) if the lender is the highest bidder. But if a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in excess proceeds—that is, money over and above what's needed to pay off all the liens on your property—you're entitled to that surplus money.

 

What Are the Options Available for Borrowers During Foreclosure in Nevada?  

A few potential ways to stop a foreclosure include reinstating the loan, redeeming the property before the sale, or filing for bankruptcy. Of course, if you can work out a loss mitigation option, like a loan modification, that will also stop a foreclosure.

Reinstating the Loan

In owner-occupied housing, borrowers can reinstate their loan by paying the outstanding balance, associated costs, and fees. However, this right to reinstate expires five days prior to the foreclosure sale date. (Nev. Rev. Stat. § 107.0805, § 40.430)

 

Does Nevada Have a Redemption Period After Foreclosure?

Redeeming the property by paying off the full loan amount can halt a foreclosure, but this must be done before the foreclosure sale. While some states allow foreclosed borrowers a redemption period after the sale to buy back their home, Nevada law does not provide this option following a nonjudicial foreclosure. (Nev. Rev. Stat. § 107.080).

 

Filing for Bankruptcy

If you're facing foreclosure, filing for bankruptcy can provide immediate relief. In fact, filing for bankruptcy is the quickest way to halt foreclosure proceedings when a sale is imminent.

 

When you file for bankruptcy, an "automatic stay" goes into effect. This legal injunction prohibits the lender from foreclosing on your home or attempting to collect the debt, at least temporarily.

 

Filing for Chapter 7 bankruptcy can delay foreclosure for several months. Alternatively, a Chapter 13 filing may allow you to save your home. To understand your options, it's best to consult a local bankruptcy attorney.

 

The Servicemembers Civil Relief Act offers legal protections against foreclosure for active duty military personnel.

 

Are Deficiency Judgments Allowed After Foreclosures in Nevada?  

The borrower's total mortgage debt often exceeds the foreclosure sale price, resulting in a "deficiency" - the difference between the total debt owed and the lower sale price. For example, if the total debt is $600,000 but the home sells for only $550,000 at foreclosure, the deficiency is $50,000. In many states, the lender can then seek a personal judgment against the borrower to recover this deficiency amount. Once the lender obtains a deficiency judgment, they can collect the full $50,000 from the borrower. Deficiency judgments are generally allowed in Nevada, subject to certain limitations.

Nevada Statute of Limitations for Deficiency Judgments

In Nevada, a lender may obtain a deficiency judgment following a foreclosure sale if it files the suit within six months. (Nev. Rev. Stat. § 40.455).

 

Limitations on Deficiency Judgment Amount in Nevada

But the amount of the judgment is limited to the lesser of:

 

- the difference between the borrower's total debt and the home's fair market value as of the sale date, plus interest, or

 

- the difference between the borrower's total debt and foreclosure sale price, plus interest. (Nev. Rev. Stat. § 40.459).

 

If the party seeking the deficiency judgment acquired the right to obtain the judgment from a party that previously held that right, the judgment is limited to the difference between the amount the party paid to acquire the loan and the larger of the property's fair market value or the amount paid for the property at the foreclosure sale, plus interest and reasonable costs. (Nev. Rev. Stat. § 40.459).

 

 

When the Lender Can't Get a Deficiency Judgment in Nevada

Pursuant to Nevada Revised Statute 40.455, deficiency judgments are prohibited for purchase money loans taken out after October 1, 2009, if the following conditions are met: 1) the loan has not been refinanced,

 

Can the Bank Get a Deficiency Judgment After a Short Sale or Deed in Lieu In Nevada?

- the foreclosing creditor is a banking or financial institution

 

- the property is a single-family residence that you own at the time of the short sale or deed in lieu of foreclosure

- you used the borrowed amount to buy the property

- you have continuously occupied the property as your principal residence since getting the loan

- the short sale or deed in lieu agreement doesn't expressly state the amount of money still owed to the bank or doesn't authorize the bank to recover that amount, and

- the agreement contains a conspicuous statement that the bank has waived the right to seek a deficiency and says how much is being waived. (Nev. Rev. Stat. § 40.458, § 40.429).

 

How Long Do You Have to Move Out After Foreclosure in Nevada? 

Following a foreclosure sale in Nevada, the new property owner must provide you with a notice to vacate the premises before initiating eviction proceedings in court.

 

What Are the Potential Consequences of Foreclosure?

Foreclosure can have severe financial repercussions, such as a damaged credit score, a deficiency judgment (as previously noted), and potential tax implications.

 

More Foreclosure Resources

To learn more about federal mortgage servicing regulations and foreclosure assistance programs, visit the Consumer Financial Protection Bureau (CFPB) website.

 

 

Waiting Period to Finance the Purchase of Another Home

 

Fannie May

- Foreclosure: 7 years from completion date

- Short Sale/Deed-in-Lieu:  4 years

- Chapter 7 Bankruptcy:  4 years from discharege or dismissal date

- Chapter 13 Bankruptcy:  2 years from discharge, 4 years from dismissal

 

Freddie Mac

- Foreclosure: 7 years from completion date

- Short Sale/Deed-in-Lieu:  4 years

- Chapter 7 Bankruptcy:  4 years from discharege or dismissal date

- Chapter 13 Bankruptcy:  2 years from discharge, 4 years from dismissal

 

FHA

- Foreclosure: 3 years from completion date

- Short Sale/Deed-in-Lieu:  1 year with conditions

- Chapter 7 Bankruptcy:  2 years from discharege date

- Chapter 13 Bankruptcy: with a full 1 year of payout*

* With satisfactory payment history, borrrowers can ask permission from the courts to enter into a new mortgage.

 

VA

- Foreclosure: 2 years from discharge date

- Short Sale/Deed-in-Lieu:  No spedific waiting period

- Chapter 7 Bankruptcy:  2 years from discharege date

- Chapter 13 Bankruptcy: with a full 1 year of payout*

* With satisfactory payment history, borrrowers can ask permission from the courts to enter into a new mortgage.

 

USDA/Rural

- Foreclosure: 3 years from completion date

- Short Sale/Deed-in-Lieu:  3 years from completion date

- Chapter 7 Bankruptcy:  3 years from discharge date

- Chapter 13 Bankruptcy: with a full 1 year of payout*

* With satisfactory payment history, borrrowers can ask permission from the courts to enter into a new mortgage.