Judicial vs. Non-Judicial Foreclosure
In the state of Nevada, lenders may foreclose by using either a judicial or non-judicial foreclosure process.
Judicial Foreclosure:
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. If the court declares a foreclosure, the home will generally then be auctioned off to the highest bidder.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of default.
If the “Power of Sale” clause specifies the time, place and terms of the foreclosure sale, then those procedures must be followed. If they are not specified, then foreclosure sale is carried out as follows:
A copy of the notice of default and election to sell must be mailed certified, return receipt requested, to the borrower at their last known address on the date the notice is recorded I the county the property is located in.
The owner may file an “Intent to Cure” with the Public Trustee’s office up to at least 15 days prior to the foreclosure sale and bring the loan current by noon of the day before the foreclosure sale is current in order to stop the foreclosure.
The foreclosure sale will be help at the place, time and date that is stated on the notice of default and election to sell.
Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my blog at www.SellingNorthernNV.com
Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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A 1099 is only for purposes of forgiving or not the debt. If the bak issues a 1099 A or C it means you need to handle the tax consequences (see IRS website when a 1099 has been issued). Because te bank issues a 1099 doesn’t mean that they cannot proceed to file a deficiency judgment (if judicial foreclosure and recourse loan). They have 90 days after foreclosure to file this judgment.
I lost my home to foreclosure earlier this year. Now I am being sued for the Home Equity Line of Credit Wells Fargo provided me so that I could qualify for the loan. I applied for a VA loan(my husband is a 40% disabled Vet) and was sold a conventional INTEREST ONLY mortgage($328K) with a secondary H.E.L.O.C.($78K). Total mortgage was for $390K.
I was told the VA loan process would take too long and that I could refinance in a year to a fixed rate. We had just moved to Las Vegas in 2005 when we bought our home and did not know any better.
Nevada is a recourse state which means I can be sued for the second on the home I lost, however the “second” was only taken out to qualify us for the mortgage. It is not like I took out a H.E.L.O.C and spent the money. Not only am I ruined financially, I now may lose even more due to this. Do I have any recourse in this situation?
A new statute says lenders can’t chase homeowners for more money if the owners walk away from their properties. How can I be sued for the difference between what was owed and what the mortgage was for? My mortgage was just divided between 2 loans so that I could qualify???
Thank you-Diane
email string in response to this comment:
From: Joshua Talayka
Subject: RE: comment on Judicial vs. nonjudicial foreclosure
To: Diane
Date: Tuesday, September 15, 2009, 3:16 PM
Hi Diane,
I am not aware of the new statute that you mention in your comment, but would be interested in learning more about it so that I can pass the information on to others. I do know that if the bank has sent you a 1099, then they can no longer go after you for the amount since that would mean they’ve written it off as bad debt. Did you receive a 1099 after the foreclosure?
As for what other kind of recourse you may have, that is probably a question to ask an attorney. Since your husband is a veteran, he should be entitled to free legal counsel through the VA. Also, I believe there is a federal law that prohibits granting deficiency judgments against disabled veterans. I would suggest asking an attorney about this as well.
From: diane
Sent: Tuesday, September 15, 2009 8:52 PM
To: Joshua Talayka
Subject: RE: comment on Judicial vs. nonjudicial foreclosure
Thank you for getting back to me. I did not receive a 1099. I wonder how I will get one now. Does that mean I have to add the difference between what I paid for the house and what they sold it for as “additional income” on my taxes next year?
I have no idea how to find out about the part of your email regarding federal law that prohibits granting deficiency judgments against disabled veterans. I will try and look into that.
Thank you for your time.
Diane
From: Joshua Talayka
Subject: RE: comment on Judicial vs. nonjudicial foreclosure
To: Diane
Date: Wednesday, September 16, 2009, 7:34 AM
If you do not receive a 1099, then it means the bank isn’t forgiving the remaining amount and therefore you do not have to pay taxed on the amount. However if you do get a 1099 then it will mean the debt has been forgiven. In the past the amount would then taxable as income, however you would more then likely be exempt under the mortgage debt relief act of 2007 if the loss of your house was due to some sort of hardship. See: http://sellingnorthernnv.com/2009/04/the-mortgage-debt-relief-act-of-2007-qa/ for more information on the mortgage debt relief act of 2007.
I am attaching a copy of the NV foreclosure workbook. Although the majority of the information in it will no longer be valid for you, I would suggest referring to page 11. There you will find a list of HUD approved housing counselors in NV. Since they are HUD approved, their services are suppose to be free, or close to it. Although their initial purpose is to help people avoid foreclosure, they are familiar with NV foreclosure laws and may be better able to address your concerns and point you in the right direction.
I also think your best chance of finding out about your options is to speak to an attorney. If you’re not in a position where you can afford an attorney, I would suggest trying to find a free legal aid attorney, or contacting the VA to see what they can help you with.
From: diane
Sent: Wednesday, September 16, 2009 8:15 AM
To: Joshua Talayka
Subject: RE: comment on Judicial vs. nonjudicial foreclosure
Thank you so much for taking the time to provide me with this information. You have truly been a ray of sunshine!
diane