Chance Gates' Blog

2009 FORECLOSURE LEGISLATION
By Sue Saunders, General Counsel, NVAR
The 2009 Legislature was busy trying to assist homeowners this legislative year. There are new laws which are specific to relieving some of the imbalances banks have against borrowers in foreclosures.
The first bill which was signed into law and became effective July 1, 2009, was Assembly Bill 149 (AB149). This bill provides relief for homeowners of owner-occupied houses who receive formal Notice of Default and Election to Sell (NOD) notices filed after June 30, 2009. AB 149 gives borrowers the right to seek mediation of a mortgage loan if they are the owners and occupants of that home. The borrowers have 30 days after being served with a NOD to elect to participate in mediation and notify the trustee (generally a title company). The trustee shall, in turn, notify all entities with an interest in the property that the owner is requesting mediation.
A form to request mediation and easy-to-understand instructions must be attached to the NOD notice served on the borrower. Once the homeowner requests mediation, the lender is required to participate. Mediation must then take place within 90 days of the recording of the NOD. The mediation fee is $400, to be shared equally by the homeowner and lender.
AB 149 also gives the owner-occupying homeowner the right to pay back the missed payments up until 5 days before the foreclosure sale to make good the back unpaid payments and perform under the deed of trust agreement.
Another bill which assists the homeowner in foreclosure is AB 471. This bill provides for relief from any deficiency judgment against owner-occupied homeowner if the foreclosing entity is bank which loaned the money for the purchase of the property and the homeowner lives in the property financed from the time of financing until the present. AB 471 only applies to foreclosures proceedings on loans after October 1, 2009.

Here is some more on a homeowner right to mediation before foreclosure.

Once a homeowner receives a notice of default(after July 1st 2009), they have 30 days to request mediation. The notice of default must include contact information for the lender or someone with authority to negotiate a loan modification on behalf of the lender. The mediation must occur within 90 days after the notice of default is recorded. It’s worth noting the representative of the lender must produce the original or certified copy of the deed of trust, the promissory note and each assignment of either.
Finally, if a borrower believes that the lender has participated in bad faith they may file a petition for judicial review.

It is important to realize that mediation is a form of dispute resolution and as always it is best to seek legal advice from an attorney.

source of this article come from www.buildersmagazine.com

As a Reno/Sparks real estate professional, I encourage all questions or comments on the Reno/Sparks real estate market or any of the articles posted on this blog.  I can be reached by email at:   chance at ballard-company.com or http://www.myspace.com/chancegates