Mediation Before Foreclosure For

Owner-Occupied Residential Property

by Sue Saunders, Nevada Association of REALTOR's General Counsel

Here’s the skinny on changes in the foreclosure laws which took effect July 1, 2009. Assembly Bill 149 was passed and signed into law by Governor Gibbons to take effect July 1, 2009. Basically the new law requires the foreclosing trustees to provide mediation for owner-occupied residential properties before the foreclosure can take place.

This law establishes a Foreclosure Mediation Program for owner-occupied residential properties that are subject to foreclosure notices. To qualify for the mediation program, a property must be a homeowner’s primary residence and located in Nevada. Its purpose is to help keep Nevada families in their homes.

The new law states that the trustee cannot exercise a power of sale on an owner-occupied residential property unless the trustee includes with the notice of default and election to sell (NOD) this information:

1. Contact information which the home-owner may use to reach a person with authority to negotiate a loan modification on behalf of the beneficiary of the deed of trust;

2. Contact information for at least one local housing counseling agency approved by the United States Department of Housing and Urban Development (HUD); and

3. A form upon which the home-owner may indicate his election to enter into mediation or to waive mediation and one envelope addressed to the trustee and one envelope addressed to the Mediation Administrator, which the home-owner may use to comply with the provisions of subsection.

The trustee must also serve a copy of the NOD and contact information upon the Mediation Administrator and record at the office of the recorder of the county in which the trust property or some part of it is situated, the NOD, contact information, and a certificate from the Mediation Administrator which says no mediation is required or that mediation has been completed.

The new law requires that the home-owner complete the mediation form no later than 30 days after service of the NOD upon him and return it by certified mail to the trustee.

If the home-owner indicates on the form his election to enter into mediation, the trustee shall notify the beneficiary of the deed of trust by certified mail of the election of the home-owner to enter into mediation and file the form with the Mediation Administrator, who shall assign the matter to a mediator and schedule the matter for mediation.

No further action may be taken to exercise the power of sale until the completion of the mediation.

The cost of the mediation is $400, shared equally by the homeowner and the lender. Each party must pay their $200 portion prior to the mediation.

There is also another bonus with the new law. The home-owner has until 5 days before the trustee’s foreclosure sale to make up back payments and reinstate the loan. This extends the time to make good the deficiency in performance or payment on the mortgage by 3 to 5 months. The old law only gave the home-owner 35 days after the NOD to reinstate the loan.

For more information on the Foreclosure Mediation Program, visit

www.nevadajudiciary.us.

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