In October of 2013, the so-called “Homeowner’s bill of rights” went into effect in Nevada. Although the term “bill of rights” has been applied to laws that do not necessarily assist consumers in the past, Senate Bill (SB) 3211)of 2013 does justice to the everyday connotation of the phrase “bill of rights.” I have read through the bill 2)you are welcome, and have extracted the parts I feel are most beneficial to a homeowner on the brink of foreclosure.
Necessary foreclosure notice to provide to a homeowner
We will start with Section 10 of SB 321 that describes a summary of the information a lender must provide to a borrower at least thirty days before recording a notice of default with the county. The summary must include:
1. The total amount of payment necessary to cure the default and reinstate the residential mortgage loan or to bring the residential mortgage loan into current status;
2. The amount of the principal obligation under the residential mortgage loan;
3. The date through which the borrower’s obligation under the residential mortgage loan is paid;
4. The date of the last payment by the borrower;
5. The current interest rate in effect for the residential mortgage loan, if the rate is effective for at least 30 calendar days;
6. The date on which the interest rate for the residential mortgage loan may next reset or adjust, unless the rate changes more frequently than once every 30 calendar days;
7. The amount of the prepayment fee charged under the residential mortgage loan, if any;
8. A description of any late payment fee charged under the residential mortgage loan;
9. A telephone number or electronic mail address that the borrower may use to obtain information concerning the residential mortgage loan; and
10. The names, addresses, telephone numbers and Internet website addresses of one or more counseling agencies or programs approved by the United States Department of Housing and Urban Development.
In addition, the lender is required to inform the borrower that s/he may request a copy of the mortgage or deed of trust, a copy of an assignment of the lending instrument, and a copy of the borrower’s payment history.
No more dual tracking
Section 13 of the SB 321 addresses the previous tendency of lenders to negotiate with borrowers, on the one hand, while still pursuing foreclosure on the home. “If a borrower submits an application for a foreclosure prevention alternative…[the lender’s agent] may not commence a civil action for a foreclosure sale.”
The lender may put the foreclosure back on track if the borrower does not follow through with the necessary actions required by the foreclosure alternative.
Single point of contact
Many homeowners expressed frustration that there seemed to be no fixed number of people involved in a foreclosure proceeding, with some making claims that others would not live up to, and others not having the authority to make any alterations to the loan agreement. In turn, the legislature drafted Section 14 of SB 321 that states:
1. If a borrower requests a foreclosure prevention alternative, the mortgage servicer must promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.
2. A single point of contact is responsible for:
(a) Communicating the process by which a borrower may apply for an available foreclosure prevention alternative and the deadline for any required submissions to be considered for the foreclosure prevention alternatives.
(b) Coordinating receipt of all documents associated with the available foreclosure prevention alternatives and notifying the borrower of any missing documents necessary to complete an application for a foreclosure prevention alternative.
(c) Having access to current information and personnel sufficient to timely, accurately and adequately inform the borrower of the current status of the foreclosure prevention alternative.
(d) Ensuring that the borrower is considered for all foreclosure prevention alternatives offered by, or through, the mortgage servicer and for which the borrower is or may be eligible.
(e) Having access to a person or persons with the ability and authority to stop the foreclosure process when necessary.
Right of homeowner to sue
The legislature also felt that homeowners needed legal recourse against lenders that were not operating in good faith. Under Section 16, “if the court finds that the material violation was intentional or reckless, or resulted from willful misconduct by a mortgage servicer, mortgagee, beneficiary of the deed of trust or an authorized agent of such a person, the court may award the borrower the greater of treble3)meaning triple the amount actual damages or statutory damages of $50,000.” Hopefully, this provides sufficient disincentive to prevent continued bad faith.
Before we wrap up, it is important to note that these provisions do not apply to lenders that have foreclosed less than one hundred homes in the previous year.