Notice of Default - State of Nevada
Upon receipt of the foreclosure referral package, if an executed Substitution of Trustee has been received, a Notice of Breach (“NOD”) will be prepared and the documents will be forwarded to the title company for recording. Once recorded, a copy of the NOD will be mailed to all parties to the Deed of Trust and all parties that have recorded an interest against the property.
Within two weeks of the NOD recording, a TSG will be ordered. The TSG is a title search that will disclose all parties entitled to notice as well as any other encumbrances recorded against the Deed of Trust. Once received, the TSG will be reviewed to determine if defects exist that will prevent continuation of foreclosure and the TSG will be forwarded to the client.
Notice of Sale
Sixty days after the NOD has recorded, ARM will obtain publication and sale dates. The first publication will run one day after the three-month waiting period expires. This gives clients sufficient time to obtain appraisals and BPOs to prepare for the upcoming foreclosure sale. A copy of the Notice of Trustee Sale (“NOTS”) is sent to the client along with a blank bid sheet and Grant Deeds to be executed (if needed).
Once the sale is set, No further action will be taken until the three-month waiting period expires. Once expired, the NOTS is mailed to all parties entitled to notice and the sale is published for three successive weeks in a newspaper of general circulation for the city and county the property is located. A copy of the NOTS will be posted on the property itself.
Sale
The client is to supply the bidding instructions within 24 hours of the sale. If an escrow advance exists, the client should reflect a breakdown of the escrow to the best of its ability (example, prior foreclosure fees and costs advanced).
The sale will be conducted at the time and place set forth on the NOTS. ARM will bid according to the client’s instructions, and if there are no competitive bidders, the interest of the property will revert to the beneficiary. Third party bidders must outbid the beneficiary, and sale proceeds are distributed in order of priorities, with the beneficiary being satisfied first.
The sale may be postponed pursuant to the client’s instructions without an additional publication. The sale may be postponed up to three times at the request of the beneficiary, after which it will be necessary to republish a new sale date.
Conveyance & Final Title
After the foreclosure sale is conducted, a Trustee’s Deed Upon Sale is issued conveying title to the successful bidder. If the property reverts to the beneficiary, it is sent for recording within a few days of the sale. If a third party purchases the property, the unrecorded Trustee’s Deed will be sent to the address specified by that party.
If the property is to be conveyed to the Secretary of Housing & Urban Development (“HUD”) or Secretary of Veterans Affairs (“VA”), a Grant Deed from the beneficiary to the agency is sent to the client for execution prior to the sale.
After receipt of the Grant Deed, if it is a VA loan, the deed is sent for recording immediately. ARM will clear all taxes and surviving liens, obtain the title policy and forward it to VA within their required time line. If it is a HUD loan, ARM will await instructions to record the deed. Prior to the deed recording, we will obtain tax and lien information to verify title is clear before recording the HUD deed. Once recorded, the title policy is obtained and forwarded to HUD within their required time line. The clients are given copies of the title polices and recorded deeds.
Reinstatement
The trustors, owners and junior lienholders have a statutory right to reinstate the loan up until 35 days after the NOD is recorded and the required mailings have been sent. The beneficiary may waive the 35-day limit and accept reinstatement at any time prior to the sale. Reinstatement must be tendered in the amount of all sums due the lender plus all foreclosure fees, costs and any attorney’s fees and costs incurred. The lender may accept partial reinstatement during the foreclosure proceedings without need to cancel the foreclosure if the balance is not received. The party tendering the partial reinstatement must be notified that it is accepted as a partial reinstatement and that the foreclosure will be resumed if the balance of funds is not received within the agreed period of time. It is advisable to enter into formal written forbearance agreements, which are executed by both the lender and the party seeking to reinstate the loan, to avoid any misunderstandings or future contest of the foreclosure.
Redemption
The pre-sale redemption period is the 35-day waiting period after the NOD is recorded and the required mailings have been sent.
The only post-sale right of redemption that survives a foreclosure sale is in favor of the IRS and only if an IRS tax lien was recorded against the property. Once the sale is held, the lien is extinguished, but the IRS retains a 120-day right of redemption. During this time frame, the IRS has the right to purchase the property for the amount of the successful bid plus interest.