Foreclosure in Nevada

How a Nevada foreclosure works, step by step

1. Generally, the legal foreclosure process can't start until you're at least 120 days behind.
2. For a home loan on the house you live in, your servicer or lender must mail you a notice at least 30 days before it records a notice of default. It shows the total needed to catch up and the options it offers to avoid foreclosure.
3. The lender or the trustee records a notice of default and election to sell with the county recorder, and mails you a copy by registered or certified mail. If you live in the home, the papers must tell you how to ask the district court for mediation.
4. You have 30 days after you're served to choose mediation. The trustee can't sell until a certificate is recorded showing that mediation isn't required or has been completed.
5. At least 3 months must pass after the notice of default is recorded before the sale can go ahead. A copy of the notice of default must also be posted on the home at least 100 days before the sale.
6. If you live in the home, you must be personally served with a notice at least 60 days before the sale. It begins: "YOU ARE IN DANGER OF LOSING YOUR HOME!"
7. The trustee records a notice of sale with the time and place. A notice is posted in a public place in the county for 20 days in a row and published once a week for 3 weeks in a local newspaper. A copy goes on the home at least 15 days before the sale.
8. The sale is an auction to the highest bidder, held between 9 a.m. and 5 p.m. It takes place at the public spot the county has chosen for these sales.
9. Within 30 days, the trustee records the trustee's deed, and a copy must be posted on the home within 5 days after that. If you're still there once the buyer's title is complete, the buyer can serve a 3-day notice to leave and then go to court to have you removed.

Mediation: sitting down with your lender before a sale

Nevada's Foreclosure Mediation Program is open to owners of owner-occupied homes who get a notice of default. To join, you file a petition with the district court and pay a $25 filing fee. You also pay your share of the mediation fee, which can't total more than $500 and is split equally between you and the lender.

Once you've met the rules to join, the foreclosure can't move forward until the mediation is finished. Whoever comes for the lender must have authority to agree to a loan modification, or be able to reach someone who does. If the lender doesn't take part in good faith, the court can impose sanctions, including ordering a loan modification. If you sign up but don't show up, the court dismisses your petition.

In Clark County, the Eighth Judicial District Court runs the program, and mediations should happen within 90 days after a mediator is assigned.

You don't have to wait for a notice of default. If a HUD-approved housing counselor certifies that you have a documented financial hardship and are at imminent risk of default, you can ask for mediation early.

Mediation is your best seat at the table with your lender. If you live in the home, don't let the deadline slip by.

Catching up, and the servicer's duties

After the notice of default, the law gives a 35-day period to make up the missed payments. If you pay the missed amount plus the costs of the notice within that time, the lender can't call the whole loan due.

If the home is your primary residence, the sale can't go ahead unless the default is still unpaid at the end of a period that ends 5 days before the sale date. Before the notice of default is recorded, the lender's side must swear that it sent you a written statement of the amount needed to catch up and reinstate the loan.

Your servicer must reach out to you, in person or by phone, to look at your finances and talk through ways to avoid a sale. If you apply for a foreclosure alternative, it can't record a notice of default or a notice of sale, or hold a sale, until certain steps are done. The servicer has 30 days after you send a complete application to make a written offer or deny it. You have 14 days to accept or turn down an offer. If you're denied, you get at least 30 days to appeal.

These servicer rules don't apply to a bank or other financial institution that foreclosed on 100 or fewer owner-occupied homes in Nevada in its last reporting year.

If you show proof you're a federal, tribal or state worker, or a household member or landlord of one, no foreclosure sale can be started during a government shutdown or for 90 days after it ends.

The trustee's sale

Nevada law gives the trustee under a deed of trust the power to sell the home after a default. The person running the sale can't buy the home or have any interest in buying it. If the sale is put off out loud at the auction three times, any new sale date must be given by a new notice.

A court must void the sale if the trustee didn't substantially follow the sale law, you sue in that county within 30 days after the trustee's deed is recorded, and you record a notice of the suit within 5 days after filing. If you never got proper notice, you have 90 days after the sale to sue.

How long it takes

Foreclosure generally can't legally start until you're at least 120 days behind. Once it starts, how long you have until the sale depends on your state.

For FHA loans, HUD's time frame runs from the first legal action until the lender has clear title to the home and possession of it. In Nevada, that's 24 months, and the first legal action is recording the notice of default.

Without a court case, the notice of default starts a wait of at least 3 months. After that, the sale notice is posted for 20 days and published once a week for 3 weeks. If you ask for mediation, the foreclosure waits until the mediation is done.

These are official markers, not a forecast. Your case can move faster or slower, so don't count on extra time.

Shortfalls, leftover money and buying it back

If the sale doesn't cover the debt, the lender must ask the court for a deficiency judgment within 6 months after the sale. Before awarding one, the court holds a hearing on what the home was worth on the sale date. The judgment can't be more than the debt minus the home's fair market value, or the debt minus the sale price, whichever is less.

A bank or other financial institution can't get a deficiency at all if the home is a single-family dwelling you owned at the sale, the loan was used to buy it, you lived there as your main home the whole time, and you never refinanced.

If the sale brings in more than is owed, the extra pays junior liens in order, and any balance goes to you. A deal with someone to help you collect that money must be in writing, signed by you and notarized, and can't be made until 30 days after the sale. A fee over $2,500, not counting attorney's fees and costs, is presumed unreasonable.

A trustee's sale gives the buyer your title without any right of redemption.

If the lender goes to court instead, you can catch up the missed payments and costs until 5 business days before the court-ordered sale. The sheriff runs that sale the same way as a sale of property to pay a court judgment. After that kind of sale, the person whose property was sold can redeem it within 1 year by paying the buyer's price plus 1 percent a month.

Rules for buyers, consultants and rescue offers

• Nevada calls anyone who, as a business, buys or tries to buy a home in foreclosure from its owner a foreclosure purchaser. A home is in foreclosure once a notice of default or a foreclosure lawsuit notice is recorded against it.
• A foreclosure reconveyance is a deal where you transfer the home during a foreclosure and the buyer promises you an interest back that lets you stay after the foreclosure. That interest can be a contract for deed, a purchase agreement, or an option to buy or lease.
• If a foreclosure purchaser uses fraud or deceit, you can cancel the deal within 2 years after the transfer is recorded. Fraud by a foreclosure purchaser is also a gross misdemeanor, with up to 364 days in jail, a fine of up to $50,000, or both.
• Nevada requires licensing rules for foreclosure consultants, loan modification consultants and anyone paid to do foreclosure-help services. Anyone paid to help you with a foreclosure must sign a written contract with you before doing any work, and can't take a fee until you've signed an agreement with your lender for the help they got you.
• They can't take a lien or any interest in your home to secure their pay, and any such lien is void. And they can't tell you that you can't or shouldn't talk to your lender.
• The state's Department of Business and Industry warns against companies that push you to sell your home and lease it back, pay your mortgage to someone other than your lender, or sign your deed over to them. The Attorney General has warned of rent-to-own schemes where owners hand over title and rent the home, hoping to buy it back.
• Federal law makes it a crime to, with intent to defraud, make a practice of buying homes with FHA or VA loans in default, skipping the loan payments and keeping the rent. The penalty is up to $250,000 in fines, 5 years in prison, or both.

These rules touch how I buy. The foreclosure purchaser rules cover buyers who take title to a home while it's in foreclosure, which touches a cash offer, taking over payments, seller financing and a lease option. The buy-back rule touches a lease option or any deal that lets you stay. The federal equity skimming law touches taking over payments on an FHA or VA loan. And don't stop talking to your lender while you weigh any offer, including mine.

Free help in Nevada

• Nevada Department of Business and Industry: homeowner assistance programs. Explains the state's Foreclosure Mediation Program for owner-occupied homes.
• Nevada Department of Business and Industry: mortgage and foreclosure fraud. Check that a company is licensed by the Mortgage Lending Division, and know that working with a certified housing counseling agency is free. You can file a complaint with the Division of Mortgage Lending and the Attorney General's office.
• Eighth Judicial District Court: foreclosure mediation. Mediation forms and rules for Clark County homeowners.
• Nevada Attorney General: Bureau of Consumer Protection. Where to report a scam.
• CFPB: find a housing counselor. Search HUD-approved counseling agencies in Nevada.