On July 1, 2009 Assembly Bill 149 was passed and signed into law. This new law requires the foreclosing trustee (company hired by the banks to foreclose) to provide mediation for any owner-occupied residential property before they can foreclose. Sorry investors, you won’t get to take advantage of this program. To get more information on this program you can visit http://www.nevadajudiciary.us/
The purpose of the Foreclosure Mediation Program is to keep Nevada homeowners in their homes. To qualify it must be an owner-occupied, primary residence. If you have a Notice of Default and Election To Sell filed on your home prior to July 1, 2009 you don’t qualify for this program.
Mediation is an alternative method to help parties resolve disputes by agreement with the help of trained mediators. Mediating a foreclosure action has its advantages. It is fast, inexpensive, and offers a flexibility that more formal processes do not.
The new law requires that a foreclosing trustee must include the following when they file the Notice of Default and Election To Sell (NOD) – (1) Contract information on how the homeowner can contact a person of authority to negotiate a loan modification, (2) Contact information for at least one local housing counseling agency approved by HUD, and (3) a form with the homeowner can indicate their election either enter into mediation or waive that option with envelopes addressed to the trustee and Mediation Administrator.
A homeowner must complete the mediation form no later than 30 days after service of the notice and return it by certified mail.
If the homeowner selects mediation the foreclosing trustee has to notify the beneficiary (the bank) and the Mediation Administrator who then assigns a mediator and schedules the mediation. At this point the foreclosing trustee can take no further action until the completion of the mediation.
Proposed Supreme Court rules limit mediations to four hours and require that mediations be conducted within 90 days of a foreclosure notice being filed. Those same rules also require that all decision makers be present for the mediations. That means, if an agreement is reached, it can be finalized quickly. The cost is $400 which is split between the homeowner and the lender, and it has to be paid up front.
Within 10 days of the mediation, the mediator will prepare the necessary Statement of Agreement or Non-agreement and serve it on the parties. The original will be filed with the Foreclosure Mediation Program Administrator and the mediation will be closed. If there is an agreement, the parties will execute the appropriate documents. If there is no agreement, the parties will be free to pursue other legal remedies.
This new law also gives the homeowner more time to “cure” the default by making back payments and re-instating the loan up to 5 days before the Trustee’s sale date. This has the effect of giving homeowners and additional 3 to 5 months to reinstate. The old law only gave 35 days from the date the Notice of Default was filed.
You can play a major role, with the help of a trained mediator, in deciding the outcome of your individual dilemma. Mediation is a give-and-take process in which the parties work to reach a mutually acceptable resolution to a mutual problem. Resolutions reached through foreclosure mediations are compromises that offer advantages to lenders as well as homeowners.