nevada deed of trust and foreclosure procedure long version-pps

How Nevada Deeds of Trust Work

The first part of this slide show gives you background about deeds of trust

If a borrower needs $10,000 to buy land from a seller

If a borrower needs $10,000 to buy land from a seller

Buyer Borrower

(needs $10k)

LandSeller

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

$10k

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

$10k

The lender gives the $10,000 to the borrower to buy the land

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

$10k

The lender gives the $10,000 to the borrower to buy the land

The borrower gives a $10,000 promissory note to the lender

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

$10k

The lender gives the $10,000 to the borrower to buy the land

The borrower gives a $10,000 promissory note to the lender

Promissory Note (IOU)

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

$10k

The lender gives the $10,000 to the borrower to buy the land

The borrower gives a $10,000 promissory note to the lender

Promissory Note (IOU)

The buyer gives $10,000 to the seller & seller conveys land to the buyer/borrower

If a borrower needs $10,000 to buy land from a seller, and a lender has $10,000

Buyer Borrower

(needs $10k)

BankLender(lender has $10k)

LandSeller

$10k

The lender gives the $10,000 to the borrower to buy the land

The borrower gives a $10,000 promissory note to the lender

Promissory Note (IOU)

The buyer gives $10,000 to the seller & seller conveys land to the buyer/borrower

LandSeller

$

Promissory Note (IOU)

$10kBuyer

Borrower(needs $10k)

BankLender(lender has $10k)

If the borrower doesn’t pay the note, the lender must sue to get a judgment for $10k against the borrower, then find assets to seize.

LandSeller

$

Promissory Note (IOU)

$10kBuyer

Borrower(needs $10k)

BankLender(lender has $10k)

If the borrower doesn’t pay the note, the lender must sue to get a judgment for $10k against the borrower, then find assets to seize.

If the lender gets a deed of trust against the property as security for the note, the lender can foreclose on the deed of trust, get fully paid or get the property and apply its fair market value against the $10,000 that is owed.

LandSeller

$

Promissory Note (IOU)

$10kBuyer

Borrower(needs $10k)

BankLender(lender has $10k)

If the borrower doesn’t pay the note, the lender must sue to get a judgment for $10k against the borrower, then find assets to seize.

If the lender gets a deed of trust against the property as security for the note, the lender can foreclose on the deed of trust, get fully paid or get the property and apply its fair market value against the $10,000 that is owed.

LandSeller

$

The balance of the slide show demonstrates how deeds of trust work

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

Beneficiary of TD

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

Beneficiary of TD

The trustee’s obligations under the trust deed are:

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

Beneficiary of TD

The trustee’s obligations under the trust deed are:

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

-If borrower pays, reconvey title to borrower

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

Beneficiary of TD

The trustee’s obligations under the trust deed are:

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

-If borrower pays, reconvey title to borrower

Reconvey

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

Beneficiary of TD

The trustee’s obligations under the trust deed are:

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

-If borrower pays, reconvey title to borrower

Reconvey

-If Borrower defaults, give notice, advertise and sell the property

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Trust Deed

Land

Trustee

Grantor Trustor

BankLender(lender has $10k)

LandSeller

$

Beneficiary of TD

The trustee’s obligations under the trust deed are:

The trustee is a third party, usually a title company, who is obligated to follow the terms of the trust deed.

The borrower (also know as a grantor or trustor) transfers the property to a trustee with a special deed called a deed of trust (also know as trust deed or TD). The borrower still owns the property, but has given the power to sell it at a foreclosure to the trustee.

The lender is the beneficiary of the TD.

-If borrower pays, reconvey title to borrower

Reconvey

-If Borrower defaults, give notice, advertise and sell the property

The next slides show the foreclosure time frames

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

Foreclosure time frame

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Beneficiary of TD

BankLender(lender has $10k)

-If borrower defaults, give notice, advertise and sell the property

-If borrower pays, reconvey title to borrower

LandSeller

$

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

-If borrower defaults, give notice, advertise and sell the property

-If borrower pays, reconvey title to borrower

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

35days

Right to cure (pay all expenses + back pymts)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

-If borrower defaults, give notice, advertise and sell the property

-If borrower pays, reconvey title to borrower

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

55days

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

35days

Right to cure (pay all expenses + back pymts)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

-If borrower defaults, give notice, advertise and sell the property

-If borrower pays, reconvey title to borrower

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

35days

Right to cure (pay all expenses + back pymts)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

-If borrower defaults, give notice, advertise and sell the property

-If borrower pays, reconvey title to borrower

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

The land is sold on this date by the trustee—Who will be the buyer?

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Credit bid(decrease sthe amount owed)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

The lender/beneficiary?

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Credit bid(decrease sthe amount owed)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

The lender/beneficiary?

Or a 3rd party buyer? 3P

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

Trust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Credit bid(decrease sthe amount owed)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

The lender/beneficiary?

Or a 3rd party buyer? 3P

If the lender wants to sue the borrower for a deficiency, the lender must sue within 6 months of the foreclosure

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3PTrust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

Credit bid(decrease sthe amount owed)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

If the lender wants to sue the borrower for a deficiency, the lender must sue within 6 months of the foreclosure

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3PTrust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

How is the deficiency calculated?

Credit bid(decrease sthe amount owed)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10k

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3PTrust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

How is the deficiency calculated?

Credit bid(decrease sthe amount owed)

Foreclosure time frame

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10kLesser of A or B (per NRS 40.459)

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3PTrust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

How is the deficiency calculated?

Credit bid(decrease sthe amount owed)

Foreclosure time frame

$0

A Amt Owed $10,000 -FMV $15,000

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10kLesser of A or B (per NRS 40.459)

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3PTrust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

How is the deficiency calculated?

Credit bid(decrease sthe amount owed)

Foreclosure time frame

$0

A Amt Owed $10,000 -FMV $15,000

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10kLesser of A or B (per NRS 40.459)

B Amt Owed $10k-Amt sold $ 1k

$9k

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3PTrust Deed

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

How is the deficiency calculated?

Credit bid(decrease sthe amount owed)

Foreclosure time frame

$0

A Amt Owed $10,000 -FMV $15,000

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10kLesser of A or B (per NRS 40.459)

B Amt Owed $10k-Amt sold $ 1k

$9k

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$

Reconvey

3P

Land

Trustee

Grantor Trustor

55days

3 weeks 6 months

Notice of Sale published 3 months (not 90 days) from recording of the Notice of Breach

Last day to sue for deficiencyNRS 40.455

How is the deficiency calculated?

Credit bid(decrease sthe amount owed)

Foreclosure time frame

$0

A Amt Owed $10,000 -FMV $15,000

Record &ServeNotice of BreachDefault

Promissory Note (IOU)

Buyer Borrower

(needs $10k)

$10kLesser of A or B (per NRS 40.459)

B Amt Owed $10k-Amt sold $ 1k

$9kTrust DeedLesser is $0, thus no deficiency

35days

Right to cure (pay all expenses + back pymts)

Advertise once a week for 3 weeks then hold Foreclosure Sale (suction)

Beneficiary of TD

BankLender(lender has $10k)

LandSeller

$