Nonjudicial Foreclosures in Nevada
Nonjudicial foreclosure commonly occurs when homeowner associations (HOAs) attempt to seek payment for super-priority liens that they place on homeowners in order to collect overdue HOA fees. The Nevada Supreme Court recently ruled that nonjudicial foreclosures do not violate the legal and constitutional protections afforded to the original mortgage holder.
In their decision, the court ruled that the process of nonjudicial foreclosures does not violate the due process rights of homeowners whose HOAs pursue foreclosure for non-payment of dues or fees assessed by the HOA. Ultimately, the ruling effectively makes it possible for HOA’s and others with liens on a property to extinguish any liens held by mortgage lenders.
Understanding Nonjudicial Foreclosure
Nevada requires anyone with a lien on a property to deliver a notice of sale to the homeowner within ten days of the lien being recorded. This notice can be served in person, published in the paper, posted on the property or within the courthouse.
No less than 60 days prior to the sale of the property, homeowners must receive a “danger notice” from the trustee of the property. This notice must include a copy of the promissory note and the reasons for the sale. It must be delivered in person to the borrower or clearly posted on the property. Ninety days after the recording of the notice of default, the trustee must record the notice of sale and provide a copy to the borrower.
Fighting Nonjudicial Foreclosure
Homeowners facing nonjudicial foreclosure must act quickly to stop the sale of the property. One way to halt the process is to pay off the lien placed on the property prior to the home being sold at auction. In Nevada, this requires homeowners to pay off the lien amount plus any costs or fees.
Other actions that can be taken by an individual’s real estate attorney include filing temporary restraining orders. These last 10 days and can give homeowners time to compile evidence showing that the lien is in error or that they are in compliance with HOA dues and fees.
Another option is to pursue a short sale. Doing so halts the foreclosure process and gives homeowners an opportunity to sell the property. Other options include requesting preliminary or permanent injunctions to permanently halt the foreclosure process. These can be highly effective if the homeowner can show that factors such as fail to perform contractual obligations, delivery of deficient services, fraud, deception, etc. are present.