Lisa and Jim's Northern Nevada Real Estate Blog: Northern Nevada Real Estate Nevada Law and Foreclosure Danger

Northern Nevada Real Estate Nevada Law and Foreclosure Danger


Northern Nevada Real Estate
Nevada Law and Foreclosure Danger
Lisa Wetzel and Jim Valentine   RE/MAX Realty Affiliates


Nevada Law And Foreclosure Danger


When the Nevada Legislature passed AB284 it was with the intention of protecting the citizens of the State from overzealous lenders aggressively pursuing flawed foreclosures. The immediate result was a dramatic lessening of Notices of Default being filed. Other impacts are now being realized that will affect the real estate industry in a very big way for at least two years.


Attorney Cassell von Baeyer, short sale/foreclosure specialist, and Steve Schiller, Sr. V.P. of Ticor Title addressed the situation before a large group of Realtors in Reno Sept. 24th. AB284 mandates that lenders filing a Notice of Default include a notarized affidavit of authority to exercise the sale based on personal knowledge, a legal term that quickly becomes problematic for the Trustee filing the NOD in the case of Mortgage Electronic Registration System, MERS, or Mortgage Backed Securities, notes. There is no way they can have "personal knowledge" of the information needed on the affidavit as reviewing files and public records don't qualify.


Here's where it gets sticky. There are penalties for violation that can include damages and an injunction stopping the sale. The biggie is the penalty that a sale MUST be declared void if the court finds that "The trustee or other person authorized to make the sale does not substantially comply with the provisions of this section ..." Wow! In other words, if the title shows a transfer to MERS, or if the note is a mortgage backed security, or any of several other areas of concern that can be deemed to violate the law whether by lack of personal knowledge or inaccuracies in the affidavit, the Trustee's Sale (foreclosure sale) MUST be voided.


What happens when a sale is voided? The prior owner still owns the house and can move back in. Any Buyer, whether at the sale on the courthouse steps, or by open market purchase, will lose their ownership position. They may file a title insurance claim, but that may not be satisfying. If you buy one cash at a Trustee's Sale you won't have insurance coverage. If you get insurance and the sale is overturned the extent of your claim is the amount of the policy, the amount you paid for the property. Any gains from improvements or appreciation will be lost. The Lender can start the process over and do it correctly, if they are able. That takes a long time.


Options to the normal non-judicial foreclosure process utilized almost exclusively in Nevada include opting for a judicial foreclosure. This isn't a good alternative in most cases due to the high cost of litigation, length of time involved, and the resulting one year right of redemption.


Our Advice: This only applies to Nevada Notices of Default that were filed on, or after, October 1, 2011. Ticor Title researched the status of such NOD's filed in Washoe County with shocking results. Their study found that 89.4% of the NOD's were flawed, would not be insurable! The Title, Legal and Real Estate professions have been attempting to work with the Attorney General's office to no avail. Fixes by the upcoming Legislature can go either way, and would be implement at the earliest on 1 July. Add four months to that before NOD's could be filed with the new rules, and a year to that for the resulting foreclosures, a two year effect on the industry.


Title is critical in real estate and this is one of the biggest things to hit the title industry in Nevada in years in our opinion. Pay attention when dealing with foreclosures - they can be great, in a positive or negative way.


When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!
Lisa Wetzel and Jim Valentine are real estate agents with RE/MAX Realty Affiliates in Gardnerville. They are short sale and foreclosure specialists and certified distressed property experts.



Contact them at 



Like us on Facebook Follow us on Twitter Visit our blog  
Lisa Wetzel & Jim Valentine
 RE/MAX Realty Affiliates
1320 US Highway 395 N.
Gardnerville, Nevada 89410
775.781.5472 - Cell
775.783.6854 - Direct
775.552.8585 - Fax
View Our Website -

Comment balloon 1 commentLisa Wetzel • December 13 2012 07:37AM


Thanks for sharing the foreclosure information.  Have a great Christmas and properous New Years.

Posted by Edward & Celia Maddox, EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD (The Celtic Connection Realty) over 7 years ago