Homeowner Bills of Rights in Nevada
(Senate Bill 321)
Many people believe lenders that pursue the foreclosure of homes go against the morals concerning borrower’s rights. Although this may be true, it happens all the time. Fortunately, the nation is making a genuine attempt to reduce the amount of foreclosures happening across the United States, and thus we see less foreclosure homes in Las Vegas.
On June 2, 2013 the Senate voted and passed Senate Bill 321 (SB 321), enacting a Homeowner Bill of Rights in Nevada, which takes effect October 1, 2013. The passing of this bill confirms that Nevada is following California’s lead by promoting legislation that creates foreclosure mediation requirements while constructing civil penalties for banks that do not follow service requirements outlined in the bill.
One of the many items SB 321 put into place is the elimination of “double tracking,” otherwise known as “dual tracking.” Double tracking or dual tracking refers to a lender’s effort to foreclose on a homeowner while the homeowner is involved in any type of foreclosure prevention method. These methods include loan modification or a short sale.
The new law is good news for homeowners that are in jeopardy of foreclosure in Las Vegas. In previous years, lenders were allowed to pursue a foreclosure action even though the homeowner was in the process of a short sale or loan modification. SB 321 prevents this action from taking place while a homeowner is using foreclosure prevention methods, even if they are pending. The homeowner must be current in their obligations and/or repayment arrangements in order for the bill to protect them against the lender pursuing the foreclosure action.
SB 321 not only prevents double tracking, but has other benefits as well. This bill requires all lenders to provide the homeowner with foreclosure prevention information at least 30 days prior to recording a Notice of Default or initiating judicial foreclosure and at least 30 days after the borrower’s default. Completion of the foreclosure process cannot begin until the lender has fulfilled all said requirements.
It is believed that SB 321 will permit more residents of Nevada to qualify for loan modifications with the security that the homeowner will be able to stay in their home without the fear of a foreclosure being pursued. This could mean a reduction in the number of foreclosure homes in Las Vegas.
With regard to short sales, the bill permits many rule changes. Effective October 1, 2013, lenders are not allowed to require sellers in a short-sale transaction to sign an agreement stating they not live in the home after the short sale is concluded. Prior to SB 321, homeowners were forced to sign an affidavit stating they had no connection with the buyer of their short sale and that they agree not to live in the home after the completion of the short sale. Now homeowners are permitted to receive help from family members or investors who can help them retain their homes. Nevertheless, the approval of the bank is still required in order for the short sale to go through.
The toll of the crashing economy does not warrant unfair practices among lenders. Kicking someone while they are down is disreputable, especially when efforts to recover their finances are in place. Luckily, SB 321 protects homeowners in this case and penalizes lenders that violate the new rules of this Nevada foreclosure law.
If you are a homeowner under pressure to fight off foreclosure, it is important to understand your options. At King Realty Group we are experts in foreclosures in Las Vegas and can help both homeowners who are facing foreclosures and buyers looking to purchase Las Vegas foreclosure homes.
For more foreclosure home information in Nevada, contact King Reality Group today.