How are trust deeds or mortgage liens treated in Nevada?

Nevada primarily operates as atitle theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is anon-judicial remedy under this theory. The document that secures the title is called adeed of trust.  Nevada law also permitsmortgages to serve as liens upon real property and forjudicial foreclosures to occur through the courts. Because thepower of sale provisions intrust deeds is a faster mechanism to effectuate foreclosure and because there is no right to redemption, this is the primary vehicle used to foreclose. Nevada has statutorily required language to be included in all deeds of trust (Nevada Revised statutes Chapter 107.030).

How are Nevada mortgages foreclosed?

The primary method of foreclosure in Nevada involves what is known asnon-judicial foreclosure. This type of foreclosure does not involve court action but requires notice commonly calledforeclosure by advertisement. When thetrust deed is initially signed it will usually contain a provision called apower of sale clause which upon default allows atrustee to sell the property in order to satisfy the underlying defaulted loan.  Thetrustee acts as a representative of the lender to effectuate the sale which typically occurs in the form of an auction. Because this is a non-judicial remedy there are very stringent notice requirements and the legal documents are required to contain thepower of sale language in order to use this type of foreclosure method.

Power of Sale Notice Requirements:

1. Prior to initiating a foreclosure the lender must serve anotice of default where a borrower has 35 days to cure any default. This must be sent by certified mail and the defaulting borrower has 15 days prior to the sale and after receiving this notice to cure any default. The foreclosure will stop if anintent to cure is filed with thePublic Trustees office within this time frame.
2. Anotice of foreclosure sale must be made within 21 days of the date of the sale and at a time, place and manner as stated in thenotice of default. Sale must take place in the same manner as an execution sale would occur in a judicial foreclosure.

In Nevada, thelenders can also go to court in what is known as ajudicial foreclosure proceeding where the court must issue a final judgment of foreclosure. Usually if the deed of trust does not contain thepower of sale language, the lender must seek judicial foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known alis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

What are the legal instruments that establish an Nevada mortgage?

The documents are known as thedeed of trust, and in a commercial transaction, asecurity agreement. Sometimes the mortgage document is combined with the security agreement.  Alternatively, amortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in thenote.

How long does it take to foreclose a property in Nevada?

Depending on the timing of the various required notices, it usually takes approximately 120 days to effectuate an uncontestednon-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and postponements of sales, or files forbankruptcy.

Is there a right of redemption in Nevada?

Nevada has no post-salestatutory right of redemption with respect to power of sale foreclosures which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. There is a one (1) year right of redemption if a foreclosure is obtained by judicial means.

Are deficiency judgments permitted in Nevada?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. Deficiency actions must be brought within 90 days of a foreclosure sale.

What statutes govern Nevada foreclosures?

The laws that govern Nevada deed of trust foreclosures are found in Chapter 107, Nevada Revised Statutes. The laws that govern mortgage foreclosures are found in Chapter 106, Nevada Revised Statutes..

http://www.leg.state.nv.us/nrs/NRS-107.html
http://www.leg.state.nv.us/nrs/NRS-106.html