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Foreclosure Process and Mediation Program in Nevada

In the State of Nevada, does my lender have to go to court to initiate a foreclosure against me and my property?

No. The majority of foreclosures in Nevada are trust deed foreclosures.  A trust deed foreclosure is NON-JUDICIAL, meaning your bank, lender, or mortgage servicer does not need to go to court to foreclose and sell your home.  If you have missed a mortgage payment, the lender or servicer begins the foreclosure process by mailing and recording a Notice of Default or Breach and Election to Sell.  This is notice to you that the legal foreclosure process has begun and you will have about 4 months to cure the arrearage or work something out with your lender to save your home from a foreclosure sale. 

How do I know if my lender has begun foreclosure proceedings against me?

A Notice of Default will be recorded against your property and sent via registered or certified mail with a return receipt to the homeowner and each guarantor or surety to the mortgage.  The Notice of Default must describe the deficiency and include (1) contact information for a person with the authority to negotiate a loan modification, (2) contact information of at least one HUD approved housing counseling agency the homeowner can contact for assistance, and (3) contact information for the Foreclosure Mediation Program.  The Notice of Default must also be posted on the property within 3 days of recording.  This rule applies to all single family residences or small complexes that have 4 or less units (one of which the homeowner must live in).

How soon can my lender record the Notice of Default and Election to Sell?

The Notice of Default can be recorded as soon as 1 day after the homeowner defaults.  There is no grace period but most servicers do not begin the foreclosure process immediately. 

What is mediation?

Mediation is an opportunity for homeowners and lenders to meet and discuss alternatives to foreclosure. Mediation is mandatory if you request it. You and your lender will sit down with a mediator to discuss ways to avoid or lessen the hardship of foreclosure.  The mediation requires good faith on the part of both you and your lender.  This means you cannot request mediation to simply delay the foreclosure sale. 

How do I know if I am eligible to participate in mediation and how do I request it?

Mediation applies to residential properties located in Nevada that are owner-occupied and the primary residence of the owners. Your lender will include the mediation request forms with your Notice of Default.  You will also receive two pre-addressed envelopes to send a copy of the mediation request and financial forms to both the Foreclosure Mediation Program and the foreclosure trustee (the agency that recorded the Notice of Default). You must elect mediation within 30 days by sending notice to the mediator and your lender otherwise you will have been deemed to have waived (given up) mediation.  You must also send $200 to the Foreclosure Program Administrator if you wish to request mediation.

Am I the only one that pays for the mediation, or does the lender have to contribute?

No. Your lender must also pay for mediation. The total cost of mediation is $400 and goes to the mediator. This cost is shared 50/50 between the homeowner and the lender. This is why you only send $200 to the Foreclosure Program Administrator.

What additional documents or information do I need for mediation?

In addition to sending the Election or Waiver of Mediation form to the Foreclosure Mediation Program and the foreclosure trustee, you also need to complete and send the Housing Affordability worksheet and the Financial Statement, which can be found on the Nevada Supreme Court's website. These forms must be sent with your Election form within 30 days after they are sent to you with the Notice of Default and then again 10 days before your actual mediation date. 10 days before the mediation you need to complete both of these forms again with updated financial information to exchange with the beneficiary of your mortgage (generally your lender) and the mediator.

In addition to the documents above, the homeowner must also submit a non-binding proposal to the mediator only.  A benchmark for this proposal could be, for instance, a modification pursuant to the Making Home Affordable program (HAMP). For further information regarding the Making Home Affordable program, please click here.

In order to have the best possible chance to work something out at mediation, you should have (1) a steady income or the prospects of a steady income in the near future; or (2) you are willing to give up your home (short sale) and want more time and/or money to move (cash for keys).  Good faith also requires your lender to accept a reasonable offer. 

How long before a mediator is assigned to my case?

The Foreclosure Mediation Program will assign a mediator 10 days after receiving the Election form from both the homeowner and the foreclosure trustee.  The mediation must then take place within 45 days of the mediator’s assignment.  The mediation process should not take longer than 135 days, from the day the Mediation Program receives both your Election of Mediation form and the form from the foreclosure trustee.

What forms and documents is the lender required to provide at mediation?

The foreclosure trustee, lender, servicer, or other representative (whoever shows up for the bank at the mediation) must also submit certain documents.  The representative must submit an appraisal no more than 60 days old, an estimate of short sale value, a non-binding proposal to resolve the foreclosure, and the original or a certified copy of the Deed of Trust, the mortgage Note, and each assignment of the Note.  Additionally, the representative must turn over how it qualifies homeowners for loan modification. If the original documents are lost or destroyed, the mediator can accept a court order to enforce a lost, destroyed, or stolen instrument.  These documents must be submitted to the mediator and exchanged between parties at least 10 days before the mediation.

What happens if the lender does not bring the required documents to mediation?

If the bank or its representative does not turn over an original or certified copy of the Note, Deed of Trust, and each assignment of the Note, the penalty is sanctions, which can include unilateral modification of the loan.  At the very least, the mediator will not certify mediation is complete so the Foreclosure Mediation Program will not issue the certificate that allows the bank to proceed with the foreclosure.  The parties must then file a petition in court to proceed with the foreclosure or seek sanctions.  The petition seeking judicial review of the mediation must be filed within 30 days after you receive the Mediator's Statement from the mediation.

What if I don’t want to participate in mediation?

If you do not wish to request mediation and instead elect to waive mediation, the foreclosure trustee (company proceeding with the forced sale of your home) can apply for a certificate that no mediation is required from the Foreclosure Medication Program Administrator by filling out and submitting their Trustee’s Affidavit.  Once the certificate that no mediation is required is received from the Foreclosure Mediation Program, the foreclosure trustee must record the certificate and send it to the homeowner.  If the homeowner does not respond to the notice advising of the right to request mediation within the 30 days to do so, the foreclosure trustee can seek the certificate that no mediation is required to proceed with the foreclosure sale.

Once the certificate that no mediation is required is recorded and sent to the homeowner, the foreclosure trustee can continue with the foreclosure pursuant to NRS 107.080.  This means that the trustee can issue the Notice of Sale 3 months after recording the Notice of Default.  
 
What happens if I am not satisfied with the outcome of mediation?

If either party is not satisfied with the outcome, a Petition for Judicial Review can be filed. This must be done within 30 days of the receipt of the mediator’s statement. These petitions must be filed with the District Court in the county where the notice of default was recorded.

Are there any additional benefits if I am an active duty service member?

The Service Members Civil Relief Act of 2003 (formerly the Soldiers’ and Sailors’ Civil Relief Act of 1940) provides additional benefits to service members on active duty.

A court order is required before a home is sold at a foreclosure sale while a service member is on activity duty or within 90 days after the end of active duty.  This law applies even in non-judicial foreclosure states like Nevada.  Therefore, a lender cannot foreclosure on a home through the trust deed foreclosure process.  Instead, the foreclosing party must file a foreclosure action in court.

If the home is sold at a foreclosure sale without a court order, the sale may be rendered invalid and could subject the lender to criminal prosecution.

The court can also stay foreclosure proceedings while the service member is on activity duty.  The military service must materially affect the service member’s ability to pay, though, in order to obtain the stay of the foreclosure proceedings.  A foreclosure obtained by default during active duty or within 60 days after the end of active duty may be reopened or set aside by the court.

Active duty service members can also request a reduction in the interest rate on any debt incurred prior to active duty.  The interest rate must be reduced to 6% while the service member is on active duty.  The service member must request the interest rate reduction from the lender and provide proof of the return to active duty in order to qualify.  If the ability to pay on the debt, though, is not materially affected by the military service, a court can decide to raise the interest rate above 6%.

When can the bank sell my home?

The Notice of Sale may be issued to the homeowner 3 months after the Notice of Default is recorded and the Foreclosure Mediation Program has issued the certificate.  The Foreclosure Mediation Program certificate must be recorded and should be done before the date the Notice of Sale is recorded.  Prior to issuing the Notice of Sale, the foreclosure trustee must issue the homeowner a danger notice.  The danger notice must be sent to the homeowner at least 60 days before the sale and notify the homeowner of a legal services organization or a HUD approved housing counseling agency the homeowner might contact for assistance, among other potentially helpful contact information.

The foreclosure trustee must record the Notice of Sale and give notice of the time and place of the sale by (1) personally serving or mailing the notice by registered or certified mail to the homeowner and all others entitled to notice (which includes any surety on the mortgage or the subordinate lien holder); (2) posting the notice in a public place where the property is located for 20 successive days; (3) publishing a copy of the notice 3 times (once a week for 3 weeks); AND (4) posting a notice on the property at least 15 days before the sale date.  This generally means that the sale date cannot be sooner than 3 weeks after the recording of the Notice of Sale.

The homeowner still has up to 5 days before the actual date of sale to cure the default and reinstate the mortgage.  If nothing is done to stop the foreclosure prior to the sale, the home can be sold at auction on the date and time listed on the Notice of Sale.