Foreclosure Mediation in Nevada

Although the so-called “financial crisis” has passed in most states, Nevada home owners are still struggling¹⁾this is not a conversation to assign blame, though with Dick Fuld coming back out from under his rock, it would not hurt, but today we speak of options for homeowners going forward.  In 2009, a foreclosure mediation program went into effect in Nevada, with encouraging results so far.  Nevada’s foreclosure mediation program accepted more than 4,200 mediations in its inaugural year of 2010²⁾the statistics are reported yearly by the Nevada Foreclosure Mediation Program.  Each year referenced is the fiscal year, meaning for 2010, the data is from July 2009 through June 2010.  In 2011, the program reached its zenith with an astounding 7,424 foreclosure mediations, but even in fiscal year 2014, the program still processed more than 2,100 cases.

In this discussion, I hope to clarify what the foreclosure mediation process is through question and answer.

 

When does foreclosure mediation become an option for an underwater³⁾this term means the home is worth less than the amount still owed on the home homeowner?

Starting in 2009 with the creation of the foreclosure mediation program by the Nevada legislature, all homeowners in default became eligible for the mediation program.  The law has been updated to now default all homeowners into the foreclosure mediation program once the trustee files a notice of default.

The lender must include a foreclosure mediation enrollment form when sending the homeowner the notice of default.  The homeowner has 30 days to return the enrollment form to the foreclosure mediation program for non-judicial foreclosure, 20 days for judicial foreclosure⁴⁾non-judicial foreclosure is done out-of-court, more about the difference in foreclosure processes will be said in later entries.  Along with the form, the homeowner and lender are responsible for paying $200 each for the services of the mediator.

 

What happens next?

Within ten days of receipt of the enrollment forms and fees, the foreclosure mediation program will assign a mediator to the case.  By statute the program has 135 days to complete the mediation.

The mediator will then hold a document conference or call in order to discuss with the homeowner what documents are necessary for the mediation to go forward.  The lender or foreclosure trustee then has five days to mail or email⁵⁾if electronic communication is agreed to by the participants the document request to the mediator and homeowner.  In turn, the homeowner has fifteen days to return the requested documents in his or her possession to the lender⁶⁾s/he is also required start obtaining the documents s/he does not currently have. The lender/trustee has another fifteen days to review the received documents, and send a supplemental request, if necessary.

 

What is required of the lender?

The lender then must provide the following documentation to the mediator and the homeowner:

1. The original mortgage note
2. The original or certified copy of the deed of trust
3. A copy of the assignment of either the note or deed of trust
4. Proof that the party representing the lender at the mediation is empowered to modify the provisions of the home loan.
5. An appraisal or Brokers Price Opinion of the home being foreclosed upon, not older than sixty days from the date of the mediation.

 

What are some other good facts to know?

• Upon completion of the mediation, each party has the right to have a district court judge in the relevant jurisdiction review the outcome.  The appeal to the court must be filed within thirty days of receipt of the mediator’s summary of the proceedings⁷⁾the mediator’s statement must be completed within ten days of the mediation.
• If the homeowner is in need an interpreter, one must be requested of the foreclosure mediation program within twenty-one days of the scheduled mediation.
• Foreclosure mediation is unavailable to those opting to file bankruptcy.

 

Stay tuned for a discussion of the difference between judicial/non-judicial mediation, and the available options out there to avoid foreclosure.