Foreclosure Rules in Nevada
Foreclosure is the process used by a lender to reclaim property when the borrower is unable to maintain the payments specified in the mortgage contract. The foreclosure process typically requires about 120 days to complete. It may take substantially longer if the borrower chooses to contest the terms of the foreclosure.
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Judicial Foreclosure
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Nevada allows two types of foreclosure proceedings. The first, referred to as a judicial foreclosure, requires the lender to appear in court to request a court order to authorize foreclosure of the property. Once this court order is issued, the home will be auctioned to the highest bidder.
Non-Judicial Foreclosure
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A non-judicial foreclosure provides the lender with the option to insert a power of sale clause into the mortgage agreement. This allows the lender to foreclose on property without the need for a court order, if the borrower has failed to meet his contractual obligations. The lender typically designates a representative, also referred to as the trustee, to ensure the foreclosure is handled smoothly.
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Power of Sale
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The power of sale clause generally establishes the details of the foreclosure proceeding. In the event that it does not, the state of Nevada has specified certain conditions that must be met. Copies of the notice of default, and election to sell must be sent via certified mail to the borrower last known address, with a return receipt request. This information must be mailed on the same date the paperwork is filed with the county in which the property is located. The borrower has up to 35 days to halt the foreclosure by paying the past due balance and any additional costs.
Right of Redemption and Deficiency
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The right of redemption provides the borrower with the option to reclaim the property after the sale by paying the entire loan balance plus foreclosure costs. In Nevada, if the foreclosure was handled through the judicial process, then the borrower has up to one year after the sale is complete to redeem the property. Non-judicial procedures do not allow a right of redemption. A deficiency occurs when the home is sold for less than the balance of the outstanding loan. The lender has 90 days after the sale to request a deficiency judgment against the original borrower for this amount.
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