The Nevada Homeowner Bill of Rights (NHBR) is a law that protects Nevada homeowners from illegal foreclosure practices. The NHBR accomplishes this by ensuring that the default process is fair, honest, and transparent to the homeowner. Set to go into effect in October 2013, the NHBR seeks to end many of the unethical foreclosure practices committed during the foreclosure scandal of 2010.
The Nevada Homeowner Bill of Rights establishes a rigorous process for mortgage holders to follow before they can foreclose the homeowner. The NHBR also requires that the mortgage holder give certain documents to the homeowner, bans dual tracking, and compels the lender to have a contact person that the homeowner can speak with.
The NHBR only applies to residential and homeowner-occupied property. If the homeowner has surrendered the property to the lender or has filed for bankruptcy, the homeowner is not protected by the NHBR.
Under the terms of the Nevada Homeowner Bill of Rights, the mortgage holder is required must notify the homeowner that he or she is in default and that foreclosure is a possibility. The mortgage holder must send the homeowner a first-class letter describing the situation and/or call the homeowner first. The homeowner cannot be charged any processing, application or servicing fees for foreclosure prevention.
The mortgage holder must also provide a contact person that the homeowner can use to communicate with the mortgage holder. Additionally, the mortgage holder must instruct the homeowner about applying for a loan modification. After notice has been given to the borrower, the borrower must send the mortgage holder an application for loan modification. Upon receiving the application, the mortgage holder is forbidden from taking any foreclosure action. The mortgage holder has thirty (30) days to decide whether to accept or reject the homeowner’s request.
If the mortgage holder denies the request, the decision must be reviewed and the homeowner has the right to appeal the decision. The mortgage holder must also inform the homeowner about possible alternatives to foreclosure, such as the Nevada Foreclosure Mediation Program. After rejecting an application for loan modification, the mortgage holder must wait thirty (30) days before beginning foreclosure.
Once foreclosure has begun, the mortgage holder must prove through documentation that the mortgage holder has legal standing to foreclose the property. If the mortgage holder wishes to complete the foreclosure, the mortgage holder is required to record a public notice of default before foreclosure. A notice of sale must be posted within nine (9) months of posting the notice of default.
The NHBR allows homeowners to seek injunctive relief if there has been a violation of the law. If the foreclosure is a judicial foreclosure, the case can be dismissed if the mortgage holder fails to post a notice of sale within the time limit or if the foreclosure sale is not conducted within ninety (90) days.
The mortgage holder must provide the homeowner with the following information:
- Statement for service members
- Summary of the homeowner’s account
- Contact information to inquire about loan a statement of facts establishing the right to foreclose
- Statement of foreclosure prevention alternatives offered by the mortgage holder, such as the Nevada Medication Program
- Statement indicating that the homeowner may request a copy of the mortgage
- The homeowner’s payment history
- Instructions about loan modification
Dual tracking is the lending practice of offering loan modification to a homeowner in debt, while foreclosing the homeowner at the same time. Duel tracking is considered unethical because it is very misleading to the homeowner.
Under the NHBR, dual tracking is illegal. If a borrower submits a loan modification application, the lender must choose to either modify the loan or foreclose the property. The lender cannot do both. The NHBR also forbids the mortgage holder from forwarding the homeowner’s case to the mortgage holder’s foreclosure department before a decision regarding loan modification has been made.
One of the worst problems a homeowner facing foreclosure can face is an army of bureaucrats, none of whom know anything about the homeowner’s case. The NHBR addresses this by requiring that the mortgage holder maintain a "contact person" for the homeowner. This contact person should be familiar with the facts of the case and that the contact person is able to keep the homeowner up to date about the status of the homeowner’s application for a loan modification.
It is important to note that the "contact person" can be a team of persons, as long as the team is available to the homeowner and familiar with the homeowner’s case.
Buying and financing a piece of real estate can be one of the most important experiences in your life. An experienced real estate attorney can advise you of the different mortgage financing options for this financial endeavor. An attorney can also review any financial documents, and advise you about your obligations and the best way to proceed.