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Many homeowners do not know the difference or understand the importance of responding to a foreclosure, regardless
of the method being used.
A Judicial Foreclosure means a lawsuit has been filed, and the bank is seeking an order from the court to sell the
home at a foreclosure sale, as well as an order for a DEFICIENCY JUDGMENT.
• If you ignore the Complaint, Default results & a Judgment will be issued
• A Default allows the bank to conduct a Foreclosure Sale
• If the property sells for less than what is owed, there will be a Deficiency Judgment
• A Judicial Foreclosure will also include a claim for the Lender’s costs of litigation
• You could owe more than just the Deficiency, plus Judgment Interest
• A Judgment can be used to garnish wages & attach assets, and will damage your credit
It is extremely important that you take action if and when you are served with a Summons and Complaint. The Lender
will not post a Notice of Default on the property when a lawsuit has been filed, the Summons and Complaint are your
notice, and you only have 20 days to Answer the Complaint after you are served.
If your home was foreclosed on by an HOA and now the bank is trying to also foreclose, you MUST respond
to the lawsuit in order to assert defenses. A recent Nevada Supreme Court decision has upheld the validity of
the HOA foreclosure statute, which means in most instances the bank does not have the right to pursue a
deficiency against the former homeowenr if it has been more than six (6) months since the HOA foreclosed.
Often banks are willing to negotiate rather than litigate a foreclosure, resulting in a loan modification,
short sale or deed-in-lieu, with deficiency waived.
A Non-Judicial Foreclosure occurs when the lender instructs a trustee to record a Notice of Default & Election to Sell
the Property (“NOD”) with the Clark County Recorder’s Office, and then has the NOD posted on the subject property
(Usually posted with blue tape). The Trustee is also required to send a copy of the NOD, along with an Election for
Mediation form via certified mail.
• If a homeowner ignores the NOD, the Trustee will be able to foreclose
• A Lender may still pursue a deficiency judgment after a non-judicial foreclosure
• Electing mediation stops the foreclosure and gives the Homeowner a chance to negotiate
• Foreclosure Mediation is not limited to just loan modifications
Many lenders are now pursuing homeowners for deficiency judgments regardless of which method of foreclosure is
used. The hope that a bank will foreclose without any pursuit is a dangerous strategy, which could leave a
homeowner exposed to a judgment and a subsequent garnishment of wages and/or limited options to avoid
the deficiency judgment. For many, it is tempting to ignore the problem, but there are severe legal and financial
ramifications to a foreclosure, short sale or bankruptcy that you should understand before making a decision.
Importantly, whether you are able to file a Chapter 7 bankruptcy or not is determined by your disposable monthly
income at the time of filing, if you wait until the foreclosure sale occurs, you may no longer be eligible for Chapter 7
depending on your income and other expenses because the monthly mortgage payment on the home is no longer due.
Similarly, if the deficiency balance when combined with your other unsecured debts exceeds $336,000, you may not be
eligible for a Chapter 13. To maximize your choice of options, contact our office today.
PURSUANT TO 11 USC SEC. 528 WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE FOR
BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.