Nevada Foreclosure Process
When a mortgage borrower is not able to make payments as mandated by the mortgage contract, the lender has the right to reclaim the property for sale the the highest bidder. This is referred to as a foreclosure. In the state of Nevada, this process typically takes 120 days, unless the borrower chooses to contest the proceedings.
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Judicial Foreclosure
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Two foreclosure methods are authorized by the state of Nevada. A judicial foreclosure requires the filing of a lawsuit against the borrower. The court will then establish a deadline for the borrower to make all necessary payments. If these terms are not met, then the court orders foreclosure proceedings to begin and the home will be sold at auction to the highest bidder.
Nonjudicial Foreclosure
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Nevada also allows nonjudicial forclosure. The lending entity has the option to forgo the court procedures by including a power of sale clause in the mortgage contract. This clause allows the lender to foreclose on the property once the mortgage is in default. The lender generally appoints a representative, also known as a trustee, to oversee this process.
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Power of Sale
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The power of sale clause usually specifies the requirements by which the foreclosure sale must abide. In the event that this information does not appear in the power of sale, then Nevada's regulations will be effective. The borrower must be served with a notice of sale via certified mail. Once the notice is received, the borrower may stop the foreclosure process by paying the delinquent amount within a time period of 15 to 35 days. The amount of time allowed depends on the date of the original deed.
Deficiency
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Nevada law allows for deficiency judgments. A deficiency occurs when the property sells for less than the amount due on the mortgage loan. When this happens, the lender has the option to file a suit demanding payment of the difference by the borrower. The lender has three months after the auction is complete to file for a deficiency judgment.
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