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Web’s Chicken Coop

“Short Sale – Dual Tracking” during residential foreclosure is where the lender pursues foreclosure AND other loan modifications (short sales) simultaneously.

SB 321 has passed and is set to be signed by the Nevada Governor.

It affects foreclosure both statutory and judicial of owner-occupied property; providing civil remedies for failure to comply with certain provisions.  It extends the foreclosure mediation process to judicial foreclosures.

It is complicated and mostly concerns actions leading up to foreclosure.

However, for re-sales, likely the most important is the elimination of the practice commonly known as “dual-tracking” by prohibiting the continuation of the foreclosure process while an application for a foreclosure prevention alternative is pending or while the borrower is current on his or her obligation under a foreclosure prevention alternative.  So, for example, if the owner enters into an arrangement with the lender, a foreclosure prevention alternative, which could arguably include a short sale, the lender is prohibited from continuing the foreclosure process until such time as the foreclosure prevention alternative is ended. This may end the surprise foreclosures the day before short sale close of escrow.

Read the whole bill here:  SB 321

Here is the Nevada Legislative Counsel’s Digest:

  Under existing law, the trustee under a deed of trust concerning owneroccupied housing has the power to sell the property to which the deed of trust applies, subject to certain restrictions. (NRS 107.080, 107.085, 107.086) Existing law also provides for a judicial foreclosure action under certain circumstances for the recovery of any debt or for the enforcement of any right secured by a mortgage or other lien upon real estate. (NRS 40.430)

  Sections 2-16 of this bill establish additional requirements for the foreclosure of owner-occupied housing securing a residential mortgage loan.

  Under section 7.5 of this bill, these additional restrictions do not apply to a financial institution that, during its immediately preceding annual reporting period, as established with its primary regulator, has foreclosed on 100 or fewer owner-occupied homes located in this State.

  Under section 30 of this bill, these additional restrictions apply only to a notice of default and election to sell which is recorded on or after October 1, 2013.

  Section 10 of this bill provides that at least 30 calendar days before recording a notice of default and election to sell or commencing a judicial foreclosure action and at least 30 calendar days after the borrower’s default, the mortgage servicer, mortgagee or beneficiary of the deed of trust must provide to the borrower certain information concerning the borrower’s account, the foreclosure prevention alternatives offered by the mortgage servicer, mortgagee or beneficiary and a statement of the facts supporting the right of the mortgagee or beneficiary to foreclose.

  Section 11 of this bill prohibits the recording of a notice of default and election to sell or the commencement of a judicial foreclosure action involving a failure to make payment until the mortgage servicer complies with certain requirements regarding contact with, or attempts to contact, the borrower.        Section 13 of this bill prohibits the practice commonly known as “dual-tracking” by prohibiting a mortgage servicer, trustee, mortgagee or beneficiary of a deed of trust from continuing the foreclosure process while an application for a foreclosure prevention alternative is pending or while the borrower is current on his or her obligation under a foreclosure prevention alternative.

  Section 14 of this bill requires a mortgage servicer to provide a single point of contact for a borrower who requests a foreclosure prevention alternative.

  Section 15 of this bill requires that under certain circumstances, a mortgage servicer, mortgagee or beneficiary of a deed of trust must dismiss a judicial foreclosure action or rescind a recorded notice  – 2 – – of default and election or notice of sale.

  Section 16 of this bill provides for certain civil remedies for a material violation of the provisions of sections 2-16.

  Section 16 also provides that a signatory to the consent judgment entered in the case entitled United States of America et al. v. Bank of America Corporation et al., who complies with the Settlement Term Sheet under that judgment is deemed to be in compliance with sections 2-16 and is not liable for a violation of those provisions.

  Section 16 further provides that if the consent judgment is modified or amended to permit compliance with the Final Servicing Rules issued by the federal Consumer Financial Protection Bureau to supersede the terms of the Settlement Term Sheet under the consent judgment: (1) a signatory to the consent judgment who complies with the modified or amended Settlement Term Sheet while the consent judgment is in effect is deemed to be in compliance with sections 2-16 and is not liable for a violation of those provisions; and (2) any mortgage servicer, mortgagee or beneficiary of the deed of trust who complies with the Final Servicing Rules is deemed to be in compliance with sections 2-16 and is not liable for a violation of those provisions.

  Section 18 of this bill provides that in a judicial foreclosure action concerning owner-occupied property, the mortgagor may elect to participate in the Foreclosure Mediation Program.

OTHER SHORT SALE POSTS

7 Tips for Short Sale

Addendum to Short Sale Listing 1.26.2010

Advance Fees Continued and the FTC 1.6.2011

Advance Fees – Short Sales – FTC II 5.4.2011

Charging for negotiating short sales/Negotiators 10.1.2010

Deficiency Judgments Nevada 4.27.2007

Foreclosure and the One Action Rule in Nevada 4.10.2007

HAMP the Federal Shortsale Program coming April 2010

Income Taxes & Foreclosures/Shortsales 12.21.2007

Income Taxes & Foreclosure/Short Sales 2013 Update

IRS PUBLICATIONS shortsales/foreclosures:

Ten Facts about Mortgage Debt Forgiveness

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.

Judicial Foreclosures (Short sales are looking more attractive..) 3.23.2012

Lender Short Sale Approval Addendum

Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale

Nevada Short Sale Documents

Seller Being Released From Liability Language in Shortsale

Seller Liability After Short Sale 4.20.2007

Short Sale Advanced Fees

Short Sale Addendum to Purchase Agreement October 2010

Short Sales and Bankruptcy and Waiting Periods 10.5.2012

Short Sale Junior Lien/Senior Liens Rights To Sue & Other Changes

Short Sale Wallet Size Answer Sheet

Questions? email me darren@dwelshlaw.com

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