Rights and Remedies of Nevada Homeowners Facing Foreclosure

When a property owner falls behind on mortgage payments, the lender will take steps to collect and at a certain point will begin a foreclosure proceeding. In Nevada, most home foreclosures follow a nonjudicial process, in which the lender need not go to court but can proceed directly to force a sale of the property. However, certain procedures must be followed, and state and federal laws allow the borrower to pursue several remedies that can forestall losing the home. 

In Nevada, mortgaged property is held under a deed of trust, which gives the lender a security interest in the property. The deed typically includes a power of sale clause that gives the lender the right to sell the home and recover the proceeds in case of default. The lender must file and record a Notice of Default and Election to Sell (NOD) with the county recorder. Once the NOD is recorded, the seller must wait 90-days before issuing a Notice of Sale, a minimum of 20 days before the actual sale date.

Property owners facing foreclosure may pursue various options, such as the following:

• Loss mitigation — Under federal law, lenders must reach out to delinquent borrowers to discuss alternatives before foreclosure. The homeowner can request loan modification, forbearance or other forms of relief. A lender must evaluate and respond to a loss mitigation request and is prohibited from pursuing a foreclosure sale while such an application is pending (known as “dual tracking”). Foreclosure usually cannot begin until the borrower is over 120 days past due.

• Foreclosure mediation — Nevada law, under NRS 107.086, provides eligible homeowners the right to request foreclosure mediation after receipt of the NOD, provided the property is owner-occupied. Mediation allows both parties to negotiate a mutually agreeable resolution, potentially leading to modification, settlement or other alternatives short of sale. The homeowner generally has 30 days from receipt of the NOD to request mediation.

• Challenging the foreclosure in court — A homeowner may file a lawsuit to challenge deficiencies in the foreclosure process, such as the lender’s failure to comply with statutory requirements, lack of proper notice, defective loan documents or lack of standing. A court may issue an injunction to delay or stop the sale pending resolution of such claims.

• Chapter 13 bankruptcy — Filing for bankruptcy triggers an automatic stay, which means that creditors must cease all collection activity, including foreclosure. Chapter 13 bankruptcy is often used by homeowners as it allows for reorganization and repayment of mortgage arrears over three to five years, which can permit the owner to keep their home. 

In order to invoke available remedies as early as possible, a Nevada homeowner confronted with foreclosure should promptly seek legal counsel. An experienced foreclosure defense attorney can assist with all aspects of pursuing loss mitigation, mediation, judicial review of procedural defects and, when needed, Chapter 13 bankruptcy. The sooner an attorney is involved, the more effective they can be.

At Miller Law, Inc. in Winnemucca, our attorneys offer comprehensive guidance for homeowners facing foreclosure, including representation in a bankruptcy proceeding. Call us at 775-623-5000 or contact us online to schedule an initial consultation.