11 Sep Nevada Legislative and Regulatory Update
The Nevada legislature recently amended its laws governing foreclosure of liens by a homeowners’ association, the recording of a conveyance after a deed in lieu of foreclosure, and liens on real property, effective October 1, 2015. The Division of Mortgage Lending issued a memo on August 12, 2015 revising the disclosure forms to be provided by mortgage brokers to private investors.
NEVADA ASSEMBLY BILL 141
The homeowners’ association or other person conducting the sale must also mail, within 10 days after the notice of default and election to sell is recorded, a copy of the notice by first-class mail to:
- Each person who has requested notice;
- Any holder of a recorded security interest encumbering the unit’s owner’s interest (previously required to notify the association, 30 days before the recordation of the notice of default, of the existence of the security interest); and
- A purchaser of the unit, if the unit’s owner has notified the association, 30 days before the recordation of the notice, that the unit is the subject of a contract of sale and the association has been requested to furnish the certificate required to be furnished to the unit’s owner.
NEVADA ASSEMBLY BILL 183
After the conveyance of real property pursuant to an agreement for a deed in lieu of a foreclosure sale, the lender must, within 30 days after the date of the conveyance, record the conveyance by recording a deed in the office of the county recorder of the county in which the property is located.
If the lender fails to record a deed as required above, the lender is liable in a civil action:
- To a borrower of the deed in lieu of foreclosure or any party that is a senior lienholder against the property that is the subject of the sale in a sum of up to $500 and for reasonable attorney’s fees and the costs of bringing the action; and
- For any actual damages caused by the failure to comply with the above provisions and for reasonable attorney’s fees and the costs of bringing the action.
NEVADA SENATE BILL 453
“Foreclosure sale” means the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale.
“Mortgage or other lien” includes a deed of trust, but does not include mechanics’ and materialmen’s liens or liens pursuant to a judgment or decree of any court of competent jurisdiction.
“Sale in lieu of a foreclosure sale” means a sale of real property pursuant to an agreement between a person to whom an obligation secured by a mortgage or other lien on real property is owed and the borrower of that obligation in which the sales price of the real property is insufficient to pay the full outstanding balance of the obligation and the costs of the sale. The term includes, without limitation, a deed in lieu of a foreclosure sale.
If an action for foreclosure affecting owner-occupied housing is commenced in a court of competent jurisdiction, the copy of the complaint served on the borrower must include a separate document containing a notice provided by the Mediation Administrator indicating that the borrower will be enrolled to participate in mediation.
If the borrower elects to waive mediation, he or she must, not later than the date on which an answer to the complaint is due, complete the required form, file the form with the court and return a copy of the form to the lender by certified mail, return receipt requested. If the borrower does not elect to waive mediation, he or she must, not later than the date on which an answer to the complaint is due, pay to the Mediation Administrator his or her share of the established fee. Upon receipt of the share of the established fee owed by the borrower, the Mediation administrator must notify the lender, by certified mail, return receipt requested, of the enrollment of the borrower to participate in mediation and must assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for mediation. Upon the lender’s receipt of such notice, the lender must notify any person with an interest, by certified mail, return receipt requested, of the election of the borrower to participate in mediation. The judicial foreclosure action must be stayed until the completion of the mediation. If the borrower indicates on the required form of his or her election to waive mediation or fails to pay the Mediation Administrator his or her share of the established fee as required, no mediation is required in the action and the action must proceed.
If the borrower is enrolled to participate in mediation but fails to attend the mediation, no mediation is required and the judicial foreclosure action must proceed as if the borrower had elected to waive mediation.
“Borrower” includes the grantor of a deed of trust or the person who holds the title of record to the real property.
Following a foreclosure sale, the court may cause the proceeds of the foreclosure sale to be paid to the persons entitled to it, and in the meantime may direct it to be deposited in court.
For purposes of an action against a guarantor, surety or other obligor of an indebtedness or obligation secured by a mortgage or lien upon real property, the term “application” includes, without limitation, a complaint or other pleading to collect the indebtedness or obligation which is filed before the date and time of the foreclosure sale unless a judgment has been entered in such action.
NEVADA DIVISION OF MORTGAGE LENDING MEMO DATED AUGUST 12, 2015
The Division forms were updated and revised to make the required disclosure easier to understand and to comply with existing law. The forms have also been given a new form number and revision date and have been divided into forms A, B, C, D and E.
Forms A, B and D are required to be provided to a private investor when he or she is providing money to invest in or make a new loan.
Forms A, C and E are required to be provided to a private investor when he or she is providing money to invest in or acquire ownership of an existing loan.
The Division has also updated the Authorization to Release Financial Statement and Power of Attorney Forms for a private investor.
All of the above revised forms can be found athttp://mld.nv.gov/Industry/Private_Investor_Loans/Private_Investor_Loans_-_NRS_645B/.