Rezults Realty, Janine Ayres, Las Vegas Trustee Sale Representation

Trustee Sale Terminology:

  • Deed of Trust – The security instrument for a loan.  It is the document that is recorded in the public records.  A deed of trust contains three parties: The Trustor or the borrower, The Trustee, the entity that holds legal title, and The Beneficiary, which is the lender.  It identifies the original loan amount, the legal description of the property being used as security for the loan, the parties, inception and maturity date of the loan, provision of the loan and requirements, late fees, legal procedures, acceleration and alienation clauses and riders such as prepayment penalties or adjustable rate loan.
  • Promissory Note – Whereas the deed of trust is a security of the debt, secured by the property, the promissory note is secured by the deed of trust and is the evidence of the debt.  It is a promise to pay, signed by the borrower in favor of the lender.  It contains the terms of the loan such as interest rate and payment obligations.  The promissory note is generally not recorded.  When the loan is paid, the promissory note is marked “paid in full” and returned to the borrower, along with a recorded “Reconveyance” of the deed of trust.
  • Notice of Default – Also known as Notice of Default and Election to Sell.  Often abbreviated as NOD.  This is the document that starts the foreclosure process.  Must be mailed certified, return receipt requested, to the borrower, at their last known address, on the date the notice is recorded in the county where the property is located.  A copy is also sent to all parties who have an interest in the property (all lenders, IRS, local, state and federal tax agencies, Homeowner’s Associations, lien claimants and any parties with a recorded request to be notified).  Along with the NOD, the trustee must provide the borrower with a mediation election form.  If mediation is selected, that process must be completed before the sale, but the lender cannot be compelled to modify the loan, merely participate in the mediation.
  • Reinstatement Period – Starting on the day after the NOD is recorded with the county and mailed to the borrower, the borrower has anywhere from fifteen (15) to thirty-five (35) days to cure the default by paying the delinquent amount on the loan including back payments, foreclosure fees and other allowable expenses.  The actual amount of time given is dependent on the date of the original deed of trust.  The lender MUST allow reinstatement in this period.
  • Redemption Period – Starts on day 36 from the recorded date of the Notice of Default until day 90.  During the redemption period, the borrower can cure the default by paying the remaining loan balance along with all foreclosure fees and other allowable expenses.  The lender may allow reinstatement during this period, but is not required to. 
  • Notice of Sale – On day 91 after the NOD is recorded, the Notice of Sale is published in a newspaper of general circulation in the county where the property is located, recorded in the county where the property is located, sent to any tenants, posted on the property and posted in three public places.  The Notice of Sale, also know as NTS (Notice of Trustee Sale), must be published once a week for three consecutive weeks (21 days) prior to the trustee sale.  The Notice of Trustee Sale references the foreclosing deed of trust (recorded instrument number), the sale date, the sale location, the trustee name, the trustee sale number, the legal description of the property securing the deed of trust, the assessor parcel number, the borrower’s name, the beneficiary’s name and sometimes the address.
  • Trustee – Because mortgages do not contain a trustee, many borrowers are confused between a mortgage and a deed of trust.  Deeds of trust contain a trustee, an independent third party that does not represent the borrower nor the lender.
  • Beneficiary – the lender.
  • Default – a default on a loan occurs when the borrower does not make required payments or does not comply with the terms of a loan.
  • Foreclosure – The legal process whereby a lender takes back real property after a borrower has failed to make loan payments.
  • Judicial foreclosure – Filing a lawsuit to obtain a court order to foreclose.  Used when no power of sale is present in the mortgage or deed of trust.  The borrower has one year after the foreclosure sale to redeem the property if the judicial foreclosure process is used.
  • Non-judicial foreclosure – Used when a power of sale clause exists in a mortgage or deed of trust.  In the power of sale clause, the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default.  This power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.
  • Post Sale Right of Redemption – In Nevada, in a non-judicial foreclosure, borrowers have no rights of redemption.
  • Qualify – In reference to the trustee sale auction, the auction agent will ask if anyone wants to “qualify” – to qualify you will need to show the agent casher checks sufficient to cover any bids you will be making.  Often this is done before the auction begins inside the lobby of Nevada Legal News.  Try to keep this amount private as the other bidders will have an advantage if they know what you are holding.
  • Deficiency Judgment – a judgment resulting from a lawsuit filed for the difference in the amount of the unpaid loan and the amount collected against that loan in the foreclosure sale.
  • Deed in Lieu of Foreclosure – is a deed instrument in which a borrower conveys all interest in a real property to the lender to satisfy a loan that is in default and avoid foreclosure proceedings.
  • Loan Modification – a permanent change in one or more of the terms of a borrowers loan, allowing the loan to be reinstated and results in a payment the borrower can afford.
  • Short Sale – a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan(s).  It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.
  • Bankruptcy – A proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. Chapter 7 of the Bankruptcy Reform Act deals with liquidation, while Chapter 11 or 13 deals with reorganization.
  • HOA or CIC – Short for Homeowners Association and Common Interest Community.  A HOA is an organization created by a real estate developer for the purpose of controlling the appearance and managing any common-area assets during the marketing, managing, and selling of homes and sites in a residential subdivision. It grants the developer privileged voting rights in governing the association, while allowing the developer to exit financial and legal responsibility of the organization, typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots. It allows a civil municipality to increase its tax base, but without requiring it to provide equal services to all of its citizens. Membership in the homeowners association by a residential buyer is typically a condition of purchase; a buyer isn't given an option to reject it. Some homeowner associations hire and retain property management companies. The board of directors is responsible for the retention of these companies.
  • Trustee Deed – Simply put, a Trustee's Deed Upon Sale, also known as a Trustee's Deed Under Sale or merely a Trustee's Deed, is a deed of foreclosure. A Trustee's Deed Upon Sale is prepared after the foreclosure sale of a property and recorded in the land records of the county in which the property is located. The Trustee's Deed transfers the property to the buyer who purchased the foreclosed property.
  • Cash for Keys - Cash for keys is a way for homeowners in foreclosure -- or for tenants who are victims of foreclosure -- to receive cash in exchange for surrendering the keys and vacating. Banks generally reach an agreement with the occupants of a foreclosed home, which stipulates the home will be left in good condition and cleaned. The agreements typically set forth a specific date that the home will be left vacant, including a promise from the occupants that they will not: Vandalize the foreclosed-upon home; Strip the foreclosure of light fixtures, appliances, copper; Leave foreclosure pets behind.
  • Default Period – There is no set time.  A lender will typically begin their foreclosure following a default period.  Although the deed of trust may outline the minimum delinquency period required before the lender may begin to foreclose, there is no set time in which they must begin to foreclose on property and may take the lender as little as 30 days to 6 months or more to begin the process.
 
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