The Nevada Foreclosure Mediation Program Process in a Nutshell
In July 2009 with AB149 Nevada was one of the first states to provide Homeowners with a mechanism, enabling them to have a face-to-face with the Beneficiary, Trustee, and Mortgage Servicer, collectively referred to as their, “Lender" for their home in risk of foreclosure. Almost two years and many revisions later, the Program’s Rules were modified again in February 2011. What follows is that mechanism upon election of non-judicial foreclosure by a Lender and commencement occurs with recordation on the notice of default.
That mechanism is mandatory mediation for owner-occupied residences that were subject to Notices of Default filed on them on or after July 1, 2009. Mandatory in the sense that along with the Notice of Default being served on the Homeowner, the Lender provided an Election or Waiver Form for the Foreclosure Mediation Program along with that Notice. Upon payment of $200 and return of the Election or Waiver form to the Nevada Foreclosure Mediation Program within 30 days by the Homeowner, it is mandatory for the Lender to participate in good faith. At that point the Lender pays $200 to the Foreclosure Mediation Program.
The mechanism is mediation only insofar as the substantive negotiation and eventual result are between the Lender and the Homeowner. The Program’s rules provide for procedural aspects of the program that are not strictly mediation based principals. Primarily that is providing for a finding of good faith and the recommendation of sanctions by a Mediator in the event that one or both parties failed to participate in good faith. In traditional mediation models neither of these two would commonly be seen.
Once the Homeowner opts-in to the program the Foreclosure Mediation Program then randomly assigns the Mediation to one of a panel of 200+ Foreclosure Mediators. The Mediator schedules the Mediation to be held no later than 135 days of the date of receipt of funds from the Lender. Once the mediation date is set the Homeowner and Lender are required to provide additional documents to the Mediator in conjunction with the Mediation.
Ten days in advance of the mediation the Lender is required to supply:
a. An appraisal on the property not done more than 60 days before the commencement of the mediation. A Broker’s Price Opinion (BPO) may be provided in lieu of an appraisal IF the BPO complies with the new provisions of N.R.S. § 645.2515.
b. Estimate of the “short sale value" of the Property that it may be willing to consider if a loan modification is not agreed upon.
c. The original or a certified copy of the deed of trust, the mortgage note, and each assignment of the deed of trust and each endorsement of the mortgage note that satisfies the requirements provided in Rule 11.4 or 11.5.
- For each document provided the Lender must provide a certifying statement under oath signed before a notary under N.R.S. § 240.1655(2), which includes; name, address, capacity and authority of certifying party, that the certifying party is in actual possession of the pertinent documents, and that the documents provided are true and correct copies of the originals. Certification must contain original signature for certifying party and original seal and signature for the notary.a. The evaluative methodology used in determining eligibility or non-eligibility of the Homeowner(s) for a loan modification.
d. A confidential, non-binding proposal for resolving the foreclosure. This remains non-disclosed to the Homeowner and is for the mediator only.
e. The evaluative methodology used in determining eligibility or non-eligibility of the Homeowner(s) for a loan modification. This remains non-disclosed to the Homeowner and is for the Mediator only.
Ten days in advance of the mediation the Homeowner is required to supply:
a. A fully completed copy of the Nevada-specific Financial Statement.
b. A fully completed copy of the Nevada-specific Housing Affordability Worksheet..
c. A confidential, non-binding proposal for resolving the mediation. This remains non-disclosed to the Lender and is for the Mediator only.
If the foreclosure mediation results in an agreement between the Parties that agreement is memorialized on a Mediation Statement. The agreement may be retention of the home via modification, or liquidation via short sale, deed in lieu, cash for keys, or other graceful exit wherein the Homeowner relinquishes the property secured by the Deed of Trust back to the Lender. Regardless of the outcome, the Mediation Statement must be issued within 10 days of conclusion of the mediation and served upon all Parties to the mediation.
The next step based upon the mediation outcome would be application for and certificate issuance by the Foreclosure Mediation Program. In order for the Lender to proceed with foreclosure if mediation does not result in retention of the home for the Homeowner, they must apply for and receive a Certificate from the Foreclosure Mediation Program Administrator. The Certificate is necessary for the Lender to proceed with the foreclosure process, which would then be recordation of the Notice of Sale. The Certificate is recorded in the county the property’s default notice was originally filed in.
If either party is not satisfied with the mediation outcome they can file a petition for judicial review. The Petition must be filed with the District Court in the county the property’s default notice was filed. The time for review is 30 days from receipt of the Mediator’s Statement or 30 days following any temporary modification agreement expiration date or agreed-to vacation and relinquishment date. The Petition must be heard within 60 days of service on the Petition.