Nevada Revises Foreclosure Mediation Program and Enacts Real Property Laws
by: Zachary Pearlstein, Esq.
Nevada has revised provisions regarding its foreclosure mediation program, effective October 1, 2013.
New regulations require a trustee to send information about the Foreclosure Mediation Program to the homeowner concurrently with, but separately from, the copy of the notice of default and election to sell.
In addition, a homeowner will be automatically enrolled in the Foreclosure Mediation Program unless they waive mediation, or fail to pay their share of the established fee.
If the homeowner waives mediation, fails to pay his or her share of the fee, or fails to appear at a scheduled mediation, the Mediation Administrator must provide to the trustee a certificate authorizing the continuation of the process to exercise the power of sale.
Another new provision requires the Mediation Administrator to, within 60 days of receiving a waiver of mediation, provide to the trustee a certificate indicating that mediation is not required in the matter. If the property is located within a common-interest community, the trustee must provide the certificate to the homeowner’s association as well.
A final revision prevents a homeowners’ association from foreclosing on an owner-occupied unit while the owner is eligible for, or participating in the Foreclosure Mediation Program.
Nevada has enacted several new protections for mortgagors, effective immediately.
A new regulation allows the owner of a single-family home that is subject to a mortgage or deed of trust, to submit a written request to the servicer for a certified copy of the note, and the mortgage or deed of trust, and each assignment thereof.
Within ten days of the request, the servicer must provide the owner with the identity, address, and contact information of the current owner or assignee of the note, and the mortgage or deed of trust.
If the servicer fails to comply within thirty days of the request, or if the documents reveal that the mortgagee does not have a recorded interest in the property, the owner may report the servicer and the mortgagee to the Division of Mortgage Lending or the Division of Financial Institutions. The agency may then take necessary action by enforcing or adopting applicable regulations.
Revised provisions governing loans secured by a lien on real property in which investors hold the beneficial interests.
Currently, when the beneficial interest in a mortgage loan belongs to multiple parties, the holders of 51% or more of the outstanding principal balance may act on behalf of all the holders of record. This law has been revised to now authorize the holders of 51% or more of the ownership interest in the real property previously securing the loan to act on behalf of all the holders of record. The revisions also require that written notice of the proposed action be given to each holder of an interest in the loan or in the property securing the loan, and specify how the interests of the dissenting minority are sold, transferred, encumbered or leased.
Current law allows a mortgage broker to place an investor into a limited liability business trust before a foreclosure, only if the broker complies with certain regulations. This law has been updated to specify that these requirements apply if private investors own real property because of a foreclosure sale, or receipt of a deed in lieu of a foreclosure sale in full satisfaction of a loan. In addition, a number of the private investors may place the loan or the real property into a limited-liability company, business trust, or other business entity on behalf of all the private investors.
This bill creates a procedure that allows a trustor to force the trustee to re-convey the deed of trust if (1) the obligation or debt secured by the deed of trust has been satisfied and the current beneficiary cannot be located after a diligent search, or refuses to execute and deliver to the trustee a proper request for re-conveyance, or (2) a balance remains due and the trustor cannot locate the beneficiary after diligent search.
The trustor must record both a surety bond, and a declaration signed under penalty of perjury, which gives certain information regarding the deed of trust. If the beneficiary of record does not object in writing within 30 days after the recording of the surety bond and declaration, the trustee must execute and record a re-conveyance of the deed of trust and that re-conveyance releases the lien of the deed of trust.
About the Author:
Zachary Pearlstein is Associate Counsel and Compliance Specialist at Bankers Advisory. He is a graduate of Brandeis University and earned his Juris Doctor at Suffolk Law School. He is admitted to the Massachusetts Bar. Zachary can be reached at zachary@bankersadvisory.com
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
We recently updated our Nevada Foreclosure Mediation video series on youtube. All of this information wasn't available at the time but you did a very nice job of providing it.