Foreclosure Laws in Nevada

Nevada allows both judicial in court or non judicial out of court foreclosures. As with all states in which both methods may be followed, the determining factor as to which method will be used is the existence of power of sale. If the deed of trust or mortgage contains a power of sale clause, this allows the bank to pursue foreclosure without petitioning the court to do so. Most deeds of trust or mortgages do contain a power of sale clause. This benefits the bank. This also means that most foreclosures are done non judicially or out of court. This is because it saves the bank both time and money to proceed this way.

If a power of sale clause is not written into the deed of trust or the mortgage of the home in question, then judicial or in court foreclosure must be followed. This process begins with the bank filing a lawsuit against the home owner who is having difficulty paying his mortgage. The bank does this to obtain a court order to foreclose. Once this court order to foreclose is obtained, the process of moving toward the sale of the home is the same as in non judicial foreclosure. The homeowner does receive a twelve month right of redemption when the judicial method of foreclosure is used. In this type of foreclosure, for the twelve months following the sale of the home at auction the person that lost their home at the sale can regain ownership of the house.

When a power of sale clause contains specific instructions as to when, where, and how the sale of the home is to take place, then those specifications must be followed. Most of the time, power of sale clauses are not so detailed, and the usual method of moving toward the sale date is followed.

The first step of that process is that a copy of the notice of default and election to sell the property is sent to the homeowner. This letter must be sent by certified return requested mail, to the last known address of the homeowner. This letter is to be mailed the same day it is recorded with the county in which the property is located.

The time line from the notice of sale to the actual auction of the house is usually one hundred and twenty days in Nevada. The scheduled sale date cannot be sooner than three months after the date the notice of default and election to sell is recorded with the county and mailed to the homeowner. The notice of default itself, specifies the time, date, and place the sale is to be held.

The process of curing the default, should the homeowner desire to do so, must be taken care of during the first thirty five days following the issuance of the notice of default and election to sell. This is a way to stop foreclosure. If the homeowner wants to do this, they must file a notice of intent to cure, no later than fifteen days prior to the scheduled sale date. The money required to cure the fault and stop the foreclosure sale will be the amount needed to bring the loan current. This dollar amount must be paid before noon the day before the scheduled auction of the home. If the homeowner does not come up with that money by that time, the sale will proceed as scheduled. The notice of default and election to sell will contain all the information about the sale; where and when it will occur. Most often, the beginning bid or the amount required to participate as a bidder on the home will be the amount of the first mortgage plus the fees and costs and interest the bank has incurred.

Being that most homes going to auction these days have very little if any equity in them, this opening virtually always too high for investors to take any interest in the home. This means that at most sales the property is taken back by the bank. This causes a lot of problems for the lender.

If the home is sold at auction for less than is owed on the loan, the bank has the right to seek the difference between what the sale generated and what they were owed from the former home owner. The bank can exercise this option for three months following the sale. After this amount of time, they can no longer seek that money. This is called a deficiency judgment. Most people who lose their home to a foreclosure sale do not have any other assets worth pursuing by the bank. The banks realize that it is a waste of time to try and get blood from a stone in these cases. So, unless the bank has reason to believe that the former homeowner has other properties worth equity or other assets they could take they will most likely not seek a deficiency judgment. To do so would just be flushing money and time down the drain.

The Five Laws of Buying Foreclosure Homes

1. Above all else, do your research. Buying a foreclosure can get you some great deals, but not all foreclosure properties guarantee savings. You have to be willing to search out the properties with the best chance for potential savings by fully examining them. Be sure to call auction or sales trustees and get all the information you can about the home before you make any decisions. Often times there may be certain things wrong with the home that a listing will not show.

2. Before you decide to pursue a foreclosure you see listed, make sure it’s being sold through a method that suits your needs and abilities. There are a lot of different kinds of foreclosures out there, from bank owned homes to pre-foreclosure properties, and choosing the right method of purchase is often just as important as choosing the right property. Some methods offer advantages that others don’t, and depending on your personal situation, others may present disadvantages. For example, pre-foreclosure homes, though they offer great deals, usually require more work. There is often a lot of cat-and-mouse phone calling involved, a great deal of bargaining, and also plenty of face-to-face meeting time to work out and close deals. If this sort of commitment is impossible for you, you’d probably be wise to consider a different type of foreclosure. You want to make sure you maximize your chances of getting the best deal possible, and putting in only half the effort required, whether you’re buying pre-foreclosures of government homes, won’t get you the kind of savings you want.

3. Perform a title search. Often times neither listings nor trustees can tell you the whole story. Sometimes foreclosed homes come with additional liens held against them by tax collectors or utilities companies. A full title search will reveal if any such liens exist. Either consult a titling agency locally or find one online. It only requires a simple phone call, but the results could save you thousands of dollars.

4. Get an independent appraisal. Most listings come with appraisal values, or if not, they are usually provided by the trustee of the sale or the local Sheriff’s office, but get one of your own just to make sure. Hire an unaffiliated, independent appraiser to inspect the house and give you an idea of its real market value, just to be sure.

5. If you have doubts, inspect the home yourself. There’s really no better way to understand what you’re buying than to actually see it. This may seem obvious, but you’d be surprised at how many people try to buy foreclosure homes based on listings alone. Inspecting a home foreclosure can give you an idea of its true condition, as well as allow you to make estimates about any repairs that will need to be done, or any maintenance you’ll need to take care of before it’s habitable. These costs all factor into your overhead when you buy them home, so be sure to calculate them exactly. If you feel the need, arrange to have a contractor join you and provide an estimate on any repairs.

The more you know about a foreclosure, the better you can calculate how much its true value is after factoring in costs and approximate market values. Remember, there is a lot out there these days, so don’t be afraid to search out the best potential values. Follow these steps to make sure you’re making a decision to buy based on the best available information, and you’ll greatly increase your chances of making a smart investment.