Nevada Deficiency Judgment Laws

Nevada Mortgage and Deficiency Laws
In this session, we are going to discuss in somewhat greater details the Nevada Mortgage Laws of Deficiency and how to handle the looming foreclosure crisis in which our beloved state of Nevada is in the highest ranks in USA.

NRS 40.430 Action for recovery of debt secured by mortgage or other lien; “action” defined.

Nevada has only One Action Law for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provisions of NRS 40.430 to 40.459, inclusive. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale of the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRS 40.462.

What is One Action Rule of Nevada?

This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred. A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

What this One Action Rule Does Not Include?
(a) To appoint a receiver for, or obtain possession of, any real or personal collateral for the debt or as provided in NRS 32.015.
(b) To enforce a security interest in, or the assignment of, any rents, issues, profits or other income of any real or personal property.
(c) To enforce a mortgage or other lien upon any real or personal collateral located outside of the State which does not, except as required under the laws of that jurisdiction, result in a personal judgment against the debtor.
(d) For the recovery of damages arising from the commission of a tort, including a recovery under NRS 40.750, or the recovery of any declaratory or equitable relief.
(e) For the exercise of a power of sale pursuant to NRS 107.080.
(f) For the exercise of any right or remedy authorized by chapter 104 of NRS or by the Uniform Commercial Code as enacted in any other state.
(g) For the exercise of any right to set off, or to enforce a pledge in, a deposit account pursuant to a written agreement or pledge.
(h) To draw under a letter of credit.
(i) To enforce an agreement with a surety or guarantor if enforcement of the mortgage or other lien has been automatically stayed pursuant to 11 U.S.C. § 362 or pursuant to an order of a federal bankruptcy court under any other provision of the United States Bankruptcy Code for not less than 120 days following the mailing of notice to the surety or guarantor pursuant to subsection 1 of NRS 107.095.
(j) To collect any debt, or enforce any right, secured by a mortgage or other lien on real property if the property has been sold to a person other than the creditor to satisfy, in whole or in part, a debt or other right secured by a senior mortgage or other senior lien on the property.
(k) Relating to any proceeding in bankruptcy, including the filing of a proof of claim, seeking relief from an automatic stay and any other action to determine the amount or validity of a debt.
(l) For filing a claim pursuant to chapter 147 of NRS or to enforce such a claim which has been disallowed.
(m) Which does not include the collection of the debt or realization of the collateral securing the debt.
(n) Pursuant to NRS 40.507 or 40.508.
(o) Which is exempted from the provisions of this section by specific statute.
(p) To recover costs of suit, costs and expenses of sale, attorneys’ fees and other incidental relief in connection with any action authorized by this subsection.

How Mortgage is Defined Under Nevada Laws?

NRS 40.433 “Mortgage or other lien” defined. A “mortgage or other lien” includes a deed of trust, but does not include a lien which arises pursuant to chapter 108 of NRS, pursuant to an assessment under chapter 116, 117, 119A or 278A of NRS or pursuant to a judgment or decree of any court of competent jurisdiction.

The Judicial Proceedings Are An Affirmative Defense

1. The commencement of or participation in a judicial proceeding in violation of NRS 40.430 does not forfeit any of the rights of a secured creditor in any real or personal collateral, or impair the ability of the creditor to realize upon any real or personal collateral, if the judicial proceeding is:
(a) Stayed or dismissed before entry of a final judgment; or
(b) Converted into an action which does not violate NRS 40.430.
2. If the provisions of NRS 40.430 are timely interposed as an affirmative defense in such a judicial proceeding, upon the motion of any party to the proceeding the court shall:
(a) Dismiss the proceeding without prejudice; or
(b) Grant a continuance and order the amendment of the pleadings to convert the proceeding into an action which does not violate NRS 40.430.
3. The failure to interpose, before the entry of a final judgment, the provisions of NRS 40.430 as an affirmative defense in such a proceeding waives the defense in that proceeding. Such a failure does not affect the validity of the final judgment, but entry of the final judgment releases and discharges the mortgage or other lien.
4. As used in this section, “final judgment” means a judgment which imposes personal liability on the debtor for the payment of money and which may be appealed under the Nevada Rules of Appellate Procedure.

How Surplus Money is Distributed?

NRS 40.440 Disposition of surplus money. If there is surplus money remaining after payment of the amount due on the mortgage or other lien, with costs, the court may cause the same to be paid to the person entitled to it pursuant to NRS 40.462, and in the meantime may direct it to be deposited in court.

FORECLOSURE SALES AND DEFICIENCY JUDGMENTS
I have been asked about deficiency judgment many times. In Nevada, the time period for filing a deficiency judgment by your lender is only 6 months. However, they can file this deficiency judgment and can enforce it later against you. I have been asked frequently about the laws of deficiency judgment in Nevada. This is a concise summary of all of the laws of deficiency judgment. Please read carefully and seek the help of a licensed attorney before doing anything or filing any action.

What is an Indebteness?

NRS 40.451 “Indebtedness” defined. “indebtedness” means the principal balance of the obligation secured by a mortgage or other lien on real property, together with all interest accrued and unpaid prior to the time of foreclosure sale, all costs and fees of such a sale, all advances made with respect to the property by the beneficiary, and all other amounts secured by the mortgage or other lien on the real property in favor of the person seeking the deficiency judgment. Such amount constituting a lien is limited to the amount of the consideration paid by the lienholder.

NRS 40.453 Waiver of rights in documents relating to sale of real property against public policy and unenforceable; exception. Except as otherwise provided in NRS 40.495:
1. It is hereby declared by the Legislature to be against public policy for any document relating to the sale of real property to contain any provision whereby a mortgagor or the grantor of a deed of trust or a guarantor or surety of the indebtedness secured thereby, waives any right secured to him by the laws of this state.
2. A court shall not enforce any such provision.

How Deficiency Judgment is Awarded?

NRS 40.455 Deficiency judgment: Award to judgment creditor or beneficiary of deed of trust.
1. Upon application of the judgment creditor or the beneficiary of the deed of trust within 6 months after the date of the foreclosure sale or the trustee’s sale held pursuant to NRS 107.080, respectively, and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if it appears from the sheriff’s return or the recital of consideration in the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively.
2. If the indebtedness is secured by more than one parcel of real property, more than one interest in the real property or more than one mortgage or deed of trust, the 6-month period begins to run after the date of the foreclosure sale or trustee’s sale of the last parcel or other interest in the real property securing the indebtedness, but in no event may the application be filed more than 2 years after the initial foreclosure sale or trustee’s sale.

What is the Procedure for a Hearing of a Deficiency Judgment in Nevada?
NRS 40.457 1. Before awarding a deficiency judgment under NRS 40.455, the court shall hold a hearing and shall take evidence presented by either party concerning the fair market value of the property sold as of the date of foreclosure sale or trustee’s sale. Notice of such hearing shall be served upon all defendants who have appeared in the action and against whom a deficiency judgment is sought, or upon their attorneys of record, at least 15 days before the date set for hearing.
2. Upon application of any party made at least 10 days before the date set for the hearing the court shall, or upon its own motion the court may, appoint an appraiser to appraise the property sold as of the date of foreclosure sale or trustee’s sale. Such appraiser shall file with the clerk his appraisal, which is admissible in evidence. The appraiser shall take an oath that he has truly, honestly and impartially appraised the property to the best of his knowledge and ability. Any appraiser so appointed may be called and examined as a witness by any party or by the court. The court shall fix a reasonable compensation for the appraiser, but his fee shall not exceed similar fees for similar services in the county where the encumbered land is situated.
NRS 40.459 Limitations on amount of money judgment. After the hearing, the court shall award a money judgment against the debtor, guarantor or surety who is personally liable for the debt. The court shall not render judgment for more than:
1. The amount by which the amount of the indebtedness which was secured exceeds the fair market value of the property sold at the time of the sale, with interest from the date of the sale; or
2. The amount which is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured, with interest from the date of sale, whichever is the lesser amount.
NRS 40.462 Distribution of proceeds of foreclosure sale.
1. Except as otherwise provided by specific statute, this section governs the distribution of the proceeds of a foreclosure sale. The provisions of NRS 40.455, 40.457 and 40.459 do not affect the right to receive those proceeds, which vests at the time of the foreclosure sale. The purchase of any interest in the property at the foreclosure sale, and the subsequent disposition of the property, does not affect the right of the purchaser to the distribution of proceeds pursuant to paragraph (c) of subsection 2 of this section, or to obtain a deficiency judgment pursuant to NRS 40.455, 40.457 and 40.459.

How Proceeds of Foreclosure is Distributed in Nevada?
(a) Payment of the reasonable expenses of taking possession, maintaining, protecting and leasing the property, the costs and fees of the foreclosure sale, including reasonable trustee’s fees, applicable taxes and the cost of title insurance and, to the extent provided in the legally enforceable terms of the mortgage or lien, any advances, reasonable attorney’s fees and other legal expenses incurred by the foreclosing creditor and the person conducting the foreclosure sale.
(b) Satisfaction of the obligation being enforced by the foreclosure sale.
(c) Satisfaction of obligations secured by any junior mortgages or liens on the property, in their order of priority.
(d) Payment of the balance of the proceeds, if any, to the debtor or his successor in interest.
 If there are conflicting claims to any portion of the proceeds, the person conducting the foreclosure sale is not required to distribute that portion of the proceeds until the validity of the conflicting claims is determined through interpleader or otherwise to his satisfaction.
3. A person who claims a right to receive the proceeds of a foreclosure sale pursuant to paragraph (c) of subsection 2 must, upon the written demand of the person conducting the foreclosure sale, provide:
(a) Proof of the obligation upon which he claims his right to the proceeds; and
(b) Proof of his interest in the mortgage or lien, unless that proof appears in the official records of a county in which the property is located.
 Such a demand is effective upon personal delivery or upon mailing by registered or certified mail, return receipt requested, to the last known address of the claimant. Failure of a claimant to provide the required proof within 15 days after the effective date of the demand waives his right to receive those proceeds.
4. As used in this section, “foreclosure sale” means the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale pursuant to NRS 107.080.
NRS 40.463 Agreement for assistance in recovering proceeds of foreclosure sale due to debtor or successor in interest; requirements for enforceable agreement; fee must be reasonable.
1. Except as otherwise provided in this section, a debtor or his successor in interest may enter into an agreement with a third party that provides for the third party to assist in the recovery of any balance of the proceeds of a foreclosure sale due to the debtor or his successor in interest pursuant to paragraph (d) of subsection 2 of NRS 40.462.
2. An agreement pursuant to subsection 1:
(a) Must:
(1) Be in writing;
(2) Be signed by the debtor or his successor in interest; and
(3) Contain an acknowledgment of the signature of the debtor or his successor in interest by a notary public; and
(b) May not be entered into less than 30 days after the date on which the foreclosure sale was conducted.
3. Any agreement entered into pursuant to this section that does not comply with subsection 2 is void and unenforceable.
4. Any fee charged by a third party for services provided pursuant to an agreement entered into pursuant to this section must be reasonable. A fee that exceeds $2,500, excluding attorney’s fees and costs, is presumed to be unreasonable. A court shall not enforce an obligation to pay any unreasonable fee, but may require a debtor to pay a reasonable fee that is less than the amount set forth in the agreement.
5. A third party may apply to the court for permission to charge a fee that exceeds $2,500. Any third party applying to the court pursuant to this subsection has the burden of establishing to the court that the fee is reasonable.
6. This section does not preclude a debtor or his successor in interest from contesting the reasonableness of any fee set forth in an agreement entered into pursuant to this section.
7. As used in this section:
(a) “Creditor” means a person due an obligation being enforced by a foreclosure sale conducted pursuant to NRS 40.451 to 40.463, inclusive.
(b) “Debtor” means a person, or the successor in interest of a person, who owes an obligation being enforced by a foreclosure sale conducted pursuant to NRS 40.451 to 40.463, inclusive.
(c) “Third party” means a person who is neither the debtor nor the creditor of a particular obligation being enforced by a foreclosure sale conducted pursuant to NRS 40.451 to 40.463, inclusive.

RIGHTS OF GUARANTOR, SURETY OR OBLIGOR IN REAL PROPERTY

NRS 40.465 “Indebtedness” defined. As used in NRS 40.475, 40.485 and 40.495, “indebtedness” means the principal balance of the obligation, together with all accrued and unpaid interest, and those costs, fees, advances and other amounts secured by the mortgage or lien upon real property.
NRS 40.475 Remedy against mortgagor or grantor; assignment of creditor’s rights to guarantor, surety or obligor. Upon full satisfaction by a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, of the indebtedness secured by a mortgage or lien upon real property, the paying guarantor, surety or other obligor is entitled to enforce every remedy which the creditor then has against the mortgagor or grantor of the mortgage or lien upon real property, and is entitled to an assignment from the creditor of all of the rights which the creditor then has by way of security for the performance of the indebtedness.
NRS 40.485 Interest in proceeds of secured indebtedness upon partial satisfaction of indebtedness. Immediately upon partial satisfaction by a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, of the indebtedness secured by a mortgage or lien upon real property, the paying guarantor, surety or other obligor automatically, by operation of law and without further action, receives an interest in the proceeds of the indebtedness secured by the mortgage or lien to the extent of the partial satisfaction, subject only to the creditor’s prior right to recover the balance of the indebtedness owed by the mortgagor or grantor.

NRS 40.495 Waiver of rights; separate action to enforce obligation; available defenses.
1. The provisions of NRS 40.475 and 40.485 may be waived by the guarantor, surety or other obligor only after default.
2. Except as otherwise provided in subsection 4, a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, may waive the provisions of NRS 40.430. If a guarantor, surety or other obligor waives the provisions of NRS 40.430, an action for the enforcement of that person’s obligation to pay, satisfy or purchase all or part of an indebtedness or obligation secured by a mortgage or lien upon real property may be maintained separately and independently from:
(a) An action on the debt;
(b) The exercise of any power of sale;
(c) Any action to foreclose or otherwise enforce a mortgage or lien and the indebtedness or obligations secured thereby; and
(d) Any other proceeding against a mortgagor or grantor of a deed of trust.
3. If the obligee maintains an action to foreclose or otherwise enforce a mortgage or lien and the indebtedness or obligations secured thereby, the guarantor, surety or other obligor may assert any legal or equitable defenses provided pursuant to the provisions of NRS 40.451 to 40.463, inclusive.
4. The provisions of NRS 40.430 may not be waived by a guarantor, surety or other obligor if the mortgage or lien:
(a) Secures an indebtedness for which the principal balance of the obligation was never greater than $500,000;
(b) Secures an indebtedness to a seller of real property for which the obligation was originally extended to the seller for any portion of the purchase price;
(c) Is secured by real property which is used primarily for the production of farm products as of the date the mortgage or lien upon the real property is created; or
(d) Is secured by real property upon which:
(1) The owner maintains his principal residence;
(2) There is not more than one residential structure; and
(3) Not more than four families reside.

Nevada Deceptive Trade Practices Laws

Everyday many homeowners are coming to my office, seeking help from the predators who had made them victims in various ways; by promising them to lower their debts; by promising them to restructure their debts; by promising to lower their interest and principal. I have heard innumerable heart broken stories. In this posting, I would highlight some of the laws which are enforceable in Nevada statute books and can be used to catch these criminals. Again, it is advisable to seek a qualified and licensed attorney in addressing your particular issues.

Most of these deceptive trade laws are contained in NRS 598.741
1. “Buyer” means a natural person who is solicited to purchase or who purchases the services of an organization which provides credit services.
2. “Commissioner” means the Commissioner of Consumer Affairs.
3. “Division” means the Consumer Affairs Division of the Department of Business and Industry.
4. “Extension of credit” means the right to defer payment of debt or to incur debt and defer its payment, offered or granted primarily for personal, family or household purposes.
5. “Organization”:
(a) Means a person who, with respect to the extension of credit by others, sells, provides or performs, or represents that he can or will sell, provide or perform, any of the following services, in return for the payment of money or other valuable consideration:
(1) Improving a buyer’s credit record, history or rating.
(2) Obtaining an extension of credit for a buyer.
(3) Providing counseling or assistance to a person in establishing or effecting a plan for the payment of his indebtedness, unless that counseling or assistance is provided by and is within the scope of the authorized practice of a debt adjuster licensed pursuant to chapter 676 of NRS.
(4) Providing advice or assistance to a buyer with regard to subparagraph (1) or (2).
(b) Does not include: [As you can see, only licensed attorneys should modify, restructure a loan or do any credit advice] (1) A person organized, chartered or holding a license or authorization certificate to make loans or extensions of credit pursuant to the laws of this state or the United States who is subject to regulation and supervision by an officer or agency of this state or the United States.
(2) A bank, credit union or savings and loan institution whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund or a private insurer approved pursuant to NRS 678.755.
(3) A person licensed as a real estate broker by this state where the person is acting within the course and scope of that license, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(4) A person licensed to practice law in this state where the person renders services within the course and scope of his practice as an attorney at law, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(5) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission where the broker-dealer is acting within the course and scope of such regulation.
(6) A person licensed as a debt adjuster pursuant to chapter 676 of NRS.
(7) A reporting agency.
6. “Reporting agency” means a person who, for fees, dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the business of assembling or evaluating information regarding the credit of or other information regarding consumers to furnish consumer reports to third parties, regardless of the means or facility of commerce used to prepare or furnish the consumer reports. The term does not include:
(a) A person solely for the reason that he conveys a decision regarding whether to guarantee a check in response to a request by a third party;
(b) A person who obtains or creates a consumer report and provides the report or information contained in it to a subsidiary or affiliate; or
(c) A person licensed pursuant to chapter 463 of NRS.
Section NRS 598.746 deals with Prohibited acts: Receiving money before complete performance; receiving money for referral to provider of credit; misleading statements; other fraudulent or deceptive acts. An organization and its agents, employees and representatives who sell or attempt to sell the services of the organization, shall not:
1. Charge or receive any money or other valuable consideration before full and complete performance of the services the organization has agreed to perform for or on behalf of the buyer.
2. Charge or receive any money or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer, if the credit which is or will be extended to the buyer is upon substantially the same terms as those available to the general public.
3. Make, counsel or advise any buyer to make, any statement which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, to a consumer credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit, with respect to a buyer’s creditworthiness, credit standing or credit capacity.
4. Make or use any untrue or misleading representations in the offer or sale of the services of an organization. For the purposes of this subsection, a “misleading representation” includes a guarantee that:
(a) The organization is able to remove information that is adverse to the buyer’s ability to obtain credit from the buyer’s credit record, history or rating.
(b) The organization is able to obtain an extension of credit for the buyer regardless of the buyer’s existing credit record, history or rating.
5. Engage, directly or indirectly, in any act, practice or course of business which operates or would operate as a fraud or deception upon any person in connection with the offer or sale of the services of an organization.
6. Remove, or assist or advise the buyer to remove from the buyer’s credit record, history or rating, information that is adverse to the buyer’s ability to obtain credit if the information is accurate and not obsolete.
7. Create, or assist or advise the buyer to create a new credit record, history or rating by using a different name, address, social security number, employee identification number or other misleading information.
8. Attempt to transfer or assign the organization’s certificate of registration.
9. Submit a buyer’s dispute to a consumer credit reporting agency without the buyer’s knowledge.
10. Call, or authorize any other person who is not the buyer to call a consumer credit reporting agency and portray himself as the buyer.

NRS 598.752 Organization to register and deposit security before advertising services or conducting business in this State; separate security not required from salesperson, agent or representative of organization; regulations.
1. Before advertising its services or conducting business in this State, an organization must register pursuant to NRS 598.721 and deposit security in the amount of $100,000 with the Division pursuant to NRS 598.726. The security must be conditioned on compliance by the organization with the provisions of NRS 598.746 to 598.772, inclusive, and the terms of its contracts with buyers.

2. If an organization has deposited the required security, a salesperson, agent or representative of the organization who sells its services is not required to deposit his own separate security. For the purposes of this subsection, a person is a salesman, agent or representative of an organization if:

(a) He does business under the same name as the organization; or

(b) The organization and the issuer of the security certify in writing that the security covers the salesperson, agent or representative.

3. The Division shall adopt such regulations as it deems necessary to carry out the provisions of this section.

NRS 598.757 Organization to provide buyer certain information in writing.
1. Before the execution of a contract between the buyer and an organization or before the receipt by the organization of any money or other valuable consideration, whichever occurs first, the organization must provide to the buyer, in writing:
(a) A statement:
(1) That the buyer has a right pursuant to 15 U.S.C. §§ 1681g and 1681h to receive disclosure of all information, except medical information, in any file on him maintained by a consumer credit reporting agency;
(2) That 15 U.S.C. § 1681j requires that this disclosure be made free to the buyer if he requests it within 30 days after receipt of notice of a denial of credit;
(3) Of the approximate cost to the buyer of receiving this disclosure when there has not been a denial of credit; and
(4) That the buyer has the right pursuant to 15 U.S.C. § 1681i to dispute the completeness or accuracy of any item contained in any file on him maintained by any consumer credit reporting agency.
(b) A detailed description of the services to be performed by the organization for the buyer and the total amount the buyer will become obligated to pay for the services.
(c) A statement that the buyer has a right to proceed against the security deposited with the Division by the organization under the circumstances and in the manner set forth in NRS 598.731 and 598.736. The statement provided pursuant to this paragraph must include the name and address of the issuer of the security.
(d) A statement that the buyer may cancel a contract for the services of an organization within 5 days after its execution by written notice mailed or delivered to the organization.
(e) A statement identifying the availability of any nonprofit association which provides services similar to those offered by the organization. The statement provided pursuant to this paragraph must include the association’s telephone number, including the association’s national toll-free telephone number, if any.
2. The written information provided pursuant to subsection 1 must be printed in at least 10-point bold type and must include the following statement or a similar statement approved by the Division:
RIGHTS OF CONSUMERS REGARDING CREDIT FILES
PURSUANT TO STATE AND FEDERAL LAW

You have the right to obtain a copy of your credit file from a consumer credit reporting agency. There is no fee if, within the past 30 days, you have been turned down for credit, employment or insurance because of information in your credit report. The consumer credit reporting agency is obligated to provide someone to help you interpret the information in your credit file.

You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit service organization has the right to have accurate, current and verifiable information removed from your credit report. Generally, under the Fair Credit Reporting Act, the consumer credit reporting agency is obligated to remove accurate, negative information from your report only if it is more than 7 years old and bankruptcy information can be reported for 10 years. If you have notified a credit reporting agency that you dispute the accuracy of information in your credit file, the consumer credit reporting agency is obligated to make an investigation and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any relevant information and copies of all documents you have concerning the disputed information should be given to the consumer credit reporting agency. If the investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep in your credit file, explaining why you think the information in the credit file is inaccurate. The consumer credit reporting agency is obligated to include your statement or a summary of your statement about disputed information in any report it issues about you.

RIGHTS OF CONSUMERS REGARDING
CANCELLATION OF A CONTRACT

You have a right to give written notice of your intent to cancel a contract with a credit service organization for any reason within 5 working days from the date you signed it. If for any reason you do cancel a contract during this time, you do not owe any money. You have a right to sue a credit service organization if it misleads you.
3. The organization shall retain a copy of the written information it provides pursuant to the requirements of subsections 1 and 2 for not less than 2 years.

NRS 598.762 Requirements of contract for purchase of services; copy of contract must be retained by organization.
1. A contract between a buyer and an organization for the purchase of the services of the organization:
(a) Must be in writing;
(b) Must be signed by the buyer;
(c) Must be dated; and
(d) Must clearly indicate above the signature line that the buyer may cancel the contract within 5 days after its execution by giving written notice to the organization of his intent to cancel the contract. If the notice is mailed, it must be postmarked not later than 5 days after the execution of the contract.
2. A copy of each contract executed by a buyer and an organization must be retained by the organization for not less than 2 years.

NRS 598.767 Organization to maintain registered agent for service of legal process. An organization shall file with the Division the information required pursuant to NRS 77.310 and continuously maintain a registered agent for service of legal process.

NRS 598.772 Waiver of statutory rights prohibited; burden of proof upon person claiming exemption or exception from definition.

1. Any waiver by a buyer of the provisions of NRS 598.746 to 598.777, inclusive, is contrary to public policy and is void and unenforceable. Any attempt by an organization to have a buyer waive rights given by NRS 598.746 to 598.777, inclusive, is unlawful.

2. In any proceeding involving NRS 598.741 to 598.787, inclusive, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(Added to NRS by 1987, 1520; A 1993, 2277)—(Substituted in revision for NRS 598.286)

NRS 598.777 Buyer’s action for recovery of damages or injunctive relief; attorney’s fees; punitive damages. A buyer injured by a violation of NRS 598.746 to 598.772, inclusive, or by a breach by an organization of a contract subject to those sections, may bring an action for recovery of damages, for injunctive relief or for both recovery of damages and injunctive relief. Judgment for damages must be entered for actual damages, but in no case less than the amount paid by the buyer to the organization, plus reasonable attorney’s fees and costs. If the court deems it proper, the court may award punitive damages.

(Added to NRS by 1987, 1520; A 1993, 2277)—(Substituted in revision for NRS 598.287)

NRS 598.782 Criminal penalty.
1. Except as otherwise provided in subsection 2, a person who violates any provision of NRS 598.746 to 598.772, inclusive, is guilty of a misdemeanor.
2. A person who breaches a contract subject to NRS 598.746 to 598.772, inclusive, is not guilty of a misdemeanor solely because of the breach.
NRS 598.787 Provisions and remedies not exclusive; violation constitutes deceptive trade practice.
1. The provisions of NRS 598.746 to 598.777, inclusive, are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with any other applicable provision of law.
2. The remedies provided in NRS 598.772 and 598.777 for violation of any provision of NRS 598.746 to 598.772, inclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.
3. Any violation of NRS 598.746 to 598.772, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.


NRS 598.900 Untrue or misleading statements by organization prohibited; effect on contract. An organization shall not make any untrue or misleading representations to the buyer or in its advertising. A contract for membership in an organization where any untrue or misleading representation was made to the buyer or the buyer was made aware of the untrue or misleading representation is void and unenforceable by the organization.

NRS 598.905 Correction of violations. If an organization does not comply with the provisions of NRS 598.840 to 598.895, inclusive, or 598.905 to 598.930, inclusive, the buyer may agree in writing, after a full disclosure, to any correction of the defect if the correction is made within 30 days after he signs the contract for membership in the organization. If the buyer does not consent, or if the correction is not made within the 30-day period, the contract is rescinded, and the buyer must be given a full refund.

NRS 598.910 Effect of transfer by organization of its obligation to provide goods or services; circumstances under which buyer may rescind contract.

1. If an organization transfers its obligation to provide goods or services to a buyer to another organization which provides substantially fewer goods or services, the buyer may consent to the transfer in writing after a full disclosure to him of the goods and services to be provided by the new organization. If a buyer does not consent, his contract is rescinded, and he must be given a refund pro rata based on the amount of time he was a member of the organization.

2. The buyer may rescind the contract and the organization shall give him a refund pro rata based on the amount of time he was a member of the organization if any of the following circumstances occur:

(a) Except as otherwise provided in this paragraph, the organization moves its place of business which is geographically closest to the buyer’s residence, as indicated in the contract, more than 20 miles farther from the buyer’s residence than it was when the contract for membership was signed. The provisions of this paragraph do not apply if:

(1) The organization offers the buyer a substantially equivalent at-home ordering service through at least one other generally available channel of communication, including, without limitation, the Internet;

(2) The at-home ordering service offers the same categories of goods and services provided by the organization at the time the organization moves its place of business; and

(3) Any goods ordered by the buyer through the at-home ordering service are shipped, at the election of the buyer, to either the buyer’s residence, as indicated in the contract, or a freight receiver within 20 miles of that residence.

(b) Within 6 months after the contract for membership was signed, the organization stops providing any category of goods or services represented to the buyer to be available when he signed the contract.

NRS 598.915 Waiver of statutory rights is void. Any waiver by the buyer of the provisions of NRS 598.840 to 598.930, inclusive, is contrary to public policy and void.
NRS 598.920 Actions against organization; restitution, treble damages, attorney’s fees and costs may be awarded.
1. A cause of action or a defense of a buyer against the organization is not extinguished by the transfer, assignment or sale of the contract for membership in the organization to a third party.

2. In an action by a buyer against an organization for violation of the provisions of NRS 598.840 to 598.930, inclusive, the court may award restitution, treble damages, reasonable attorney’s fees and costs. If the course of action was based on a violation of NRS 598.900, the court may award the buyer $1,000, reasonable attorney’s fees and costs, or restitution, treble damages, reasonable attorney’s fees and costs, whichever is greater.

NRS 598.930 Remedies not exclusive; violation constitutes deceptive trade practice.
1. The remedies, duties and prohibitions of NRS 598.840 to 598.930, inclusive, are not exclusive and are in addition to any other remedies provided by law.

NY Times Supports Bankruptcy Reform

Here, is an interesting editorial from NY Times supporting bankruptcy reform to uplift homeowners situation.

http://www.nytimes.com/2009/04/24/opinion/24fri1.html?_r=1&hpw

Nevada Notice Statutes Made Simple

Nevada Notice Laws and Foreclosure Made Simple:
NRS 107.080 Trustee’s power of sale: Power conferred; required notices; effect of sale; circumstances in which sale may be declared void.

Today, I am going to discuss the Notice statutes under the Nevada Revised statutory scheme. This is the most important statute which is almost used everyday by the lenders and the foreclosure defense attorneys. Let me be honest, this statute is mostly misinterpreted both by the Courts in Nevada and the lenders attorneys. They like to twist it and give it peculiar meanings in their own biased ways. This notice statute is not comprehensive as there are some grey areas which can be interpreted differently and of course liberally. Again, this Notice Statue is the biggest tool used by the Lenders and the Trustee, under the Trustee Deed and Notice of Default. I am posting the statute below in very simple format. Again, as we all should know by this time that Nevada is a non judicial foreclosure state. It simply means that the lender or the Trustee does not have to go to the court and establish a judicial foreclosures. A simple process of foreclosure (called statutory foreclosure) can take place outside the ambit of our judicial system. Again, in a non judicial foreclosure, there is no equity of redemption. Boring word but it is very important. Redemption means if you have money, you can pay your lender even though an auction had taken place. Sometime it last up to one year. However, in statutory foreclosure states like Nevada, there is no right of redemption. Right to Cure is only available before the auction takes place. Let us have a detailed analysis studying this statute. In due course of time, I will discuss few more statutes and the latest addition to Nevada Revised Statute including of course the statute dealing with deceptive trade practices (UDAP).

1.Notice of Breach. Here, the beneficiary or successor in interest is executed by a trustee.
2. This notice of breach is recorded in County office.
3. Three months has to be lapsed.
4. The 15-35 day period commences on the first day following the day upon which the notice of default is recorded.
5. Along with the notice of default is accompanied another notice, generally called Notice of Election to Sell.
6. These two notices has to be recorded in the county office.
7. These notices must describe the property exactly the way it was described in the Note. If there is an issue of correct description, the notice is defective.
8. The Notice of Default and Election to Sell must describe the deficiency in payment
9. It must contain notice of intent to declare the entire unpaid balance due.
10. It must describes what is an acceleration? It is the speeding of the process of payment of your loan.
11. An acceleration must not occur if payment is made or deficiency satisfied.
12. What is 3 Months Period: The trustee, or other person authorized to make the sale under the terms of the trust deed or transfer in trust, shall, after expiration of the 3-month period following the recording of the notice of breach and election to sell, and before the making of the sale, give notice of the time and place thereof by recording the notice of sale.
13. How Notice is Served? By mail, and by publication. When it comes to mailing of notice, it is served by mailing at the last known address. If the borrower had changed the address, and never notified, the service of notice has been performed.
14. A notice must be served to each person of interest. Any Persons Can of Interest who shows and like to be served a notice. It can be a wife (separated), a distant cousin, an attorney or a priest of a deeded trust.
15. A person of interest can be both husband and wife.
16. A person of interest can be anybody even your attorney or authorized representative.
17. The notice must be by certified by mail and also by ordinary mail.
18. Each trustor is entitled to a Notice.
19. Also, this Notice describing property must be conspicuously placed for 20 days for successively in three public places
20. Also, this Notice must be published three times, once each week for 3 consecutive weeks in a newspaper of general circulation.
21. There is no equity or right of redemption in Nevada.
22. When a Foreclosure Sale Can Be Voided Under NRS? A sale made pursuant to this section may be declared void by any court of competent jurisdiction in the county where the sale took place if:
(a) The trustee or other person authorized to make the sale does not substantially comply with the provisions of this section;
(b) Except as otherwise provided in subsection 6, an action is commenced in the county where the sale took place within 90 days after the date of the sale; and
(c) A notice of lis pendens providing notice of the pendency of the action is recorded in the office of the county recorder of the county where the sale took place within 30 days after commencement of the action.
23. The law states a court of competent jurisdiction. It does mean either a state or federal court. We are not sure about the competency of municipal court for finding the correct adherence of Notice statutes.
24. Any violations of this Notice Statute can void a foreclosure sale.
25. The sale of the property must be made at an auction to the highest bidder.
26. This auction can only happen between 9 a.m. and 5 p.m.
27. There are only 3 oral postponement of sale allowed in Nevada.
28. Any new information of sale must be provided under the NRS 108.80.
29. Summary Manner of Court. The court shall proceed in a summary manner in the hearing and disposition of such a motion, and give judgment and issue execution therefor forthwith, but the refusing purchaser may request a jury.
30. Limits on the Power of the Trustee. The trustee shall not exercise a power of sale pursuant not later than 60 days before the date of the sale, the trustee causes to be served upon the grantor a notice in the form described in subsection 3; and if an action is filed in a court of competent jurisdiction claiming an unfair lending practice in connection with the trust agreement, the date of the sale is not less than 30 days after the date the most recent such action is filed.
31. What is a Person With An Interest? It means any person who has or claims any right, title or interest in, or lien or charge upon, the real property described in the deed of trust, as evidenced by any document or instrument recorded in the office of the county recorder of the county in which any part of the real property is situated.
32. A person with an interest or any other person who is or may be held liable for any debt secured by a lien on the property desiring a copy of a notice of default or notice of sale under a deed of trust with power of sale upon real property may at any time after recordation of the deed of trust record in the office of the county recorder of the county in which any part of the real property is situated an acknowledged request for a copy of the notice of default or of sale. The request must state the name and address of the person requesting copies of the notices and identify the deed of trust by stating the names of the parties thereto, the date of recordation, and the book and page where it is recorded.

33. NRS 107.095 Notice of default: Mailing to guarantor or surety of debt; effect of failure to give.
34. The notice of default required by NRS 107.080 must also be sent by registered or certified mail, return receipt requested and with postage prepaid, to each guarantor or surety of the debt. If the address of the guarantor or surety is unknown, the notice must be sent to the address of the trust property. Failure to give the notice, except as otherwise provided in subsection 3, releases the guarantor or surety from his obligation to the beneficiary, but does not affect the validity of a sale conducted pursuant to NRS 107.080 nor the obligation of any guarantor or surety to whom the notice was properly given.
35. Failure to give the notice of default required by NRS 107.090, except as otherwise provided in subsection 3, releases the obligation to the beneficiary of any person who has complied with NRS 107.090 and who is or may otherwise be held liable for the debt or other obligation secured by the deed of trust, but such a failure does not affect the validity of a sale conducted pursuant to NRS 107.080 nor the obligation of any person to whom the notice was properly given pursuant to this section or to NRS 107.080 or 107.090.
36. A guarantor, surety or other obligor is not released pursuant to this section if:
37. (a) The required notice is given at least 15 days before the later of:
38. (1) The expiration of the 15- or 35-day period described in NRS 107.080; or
39. (2) Any extension of that period by the beneficiary; or
40. (b) The notice is rescinded before the sale is advertised.
41. NRS 107.100 Receiver: Appointment after filing notice of breach and election to sell.
42. At any time after the filing of a notice of breach and election to sell real property under a power of sale contained in a deed of trust, the trustee or beneficiary of the deed of trust may apply to the district court for the county in which the property or any part of the property is located for the appointment of a receiver of such property.

43. A receiver shall be appointed where it appears that personal property subject to the deed of trust is in danger of being lost, removed, materially injured or destroyed, that real property subject to the deed of trust is in danger of substantial waste or that the income therefrom is in danger of being lost, or that the property is or may become insufficient to discharge the debt which it secures.

STATEMENT FROM BENEFICIARY OF DEED OF TRUST
44. NRS 107.200 Contents of statement regarding debt secured by deed of trust. Except as otherwise provided in NRS 107.230, the beneficiary of a deed of trust secured on or after October 1, 1995, shall, within 21 days after receiving a request from a person authorized to make such a request pursuant to NRS 107.220, cause to be mailed, postage prepaid, or sent by facsimile machine to that person a statement regarding the debt secured by the deed of trust. The statement must include:
45. The amount of the unpaid balance of the debt secured by the deed of trust, the rate of interest on the unpaid balance and the total amount of principal and interest which is due and has not been paid.
46. The amount of the periodic payments, if any, required under the note.
47. The date the payment of the debt is due.
48. The period for which real estate taxes and special assessments have been paid, if that information is known to the beneficiary.
49. The amount of property insurance covering the real property and the term and premium of that insurance, if that information is known to the beneficiary.
50. The amount in an account, if any, maintained for the accumulation of money for the payment of taxes and insurance premiums.
51. The amount of any additional charges, costs or expenses paid or incurred by the beneficiary which is a lien on the real property described in the deed of trust.
52. Whether the debt secured by the deed of trust may be transferred to a person other than the grantor.
53. NRS 107.210 Contents of statement of amount necessary to discharge debt secured by deed of trust. Except as otherwise provided in NRS 107.230 and 107.240, the beneficiary of a deed of trust secured on or after October 1, 1995, shall, within 21 days after receiving a request from a person authorized to make such a request pursuant to NRS 107.220, cause to be mailed, postage prepaid, or sent by facsimile machine to that person a statement of the amount necessary to discharge the debt secured by the deed of trust. The statement must set forth:
54. The amount of money necessary to discharge the debt secured by the deed of trust on the date the statement is prepared by the beneficiary; and
55. The information necessary to determine the amount of money required to discharge the debt on a per diem basis for a period, not to exceed 30 days, after the statement is prepared by the beneficiary.

NRS 107.220 Persons authorized to request statement from beneficiary; proof of identity of successor in interest.
56. 1. A statement described in NRS 107.200 or 107.210 may be requested by:
57. (a) The grantor of, or his successor in interest in, the property which is the subject of the deed of trust;
58. (b) A person who has a subordinate lien or encumbrance of record on the property which is secured by the deed of trust;
59. (c) A title insurer; or
60. (d) An authorized agent of any person described in paragraph (a), (b) or (c).
61. A written statement signed by any person described in paragraph (a), (b) or (c) which appoints a person to serve as his agent if delivered personally to the beneficiary or delivered by mail, return receipt requested, is proof of the identity of an agent.
62. 2. For the purposes of paragraph (a) of subsection 1, a policy of title insurance, preliminary report issued by a title company, certified copy of letters testamentary or letters of guardianship, or an original or photographic copy of a deed, if delivered personally to the beneficiary or delivered by mail, return receipt requested, is proof of the identity of a successor in interest of the grantor, if the person demanding the statement is named as successor in interest in the document.
63. NRS 107.230 Proof of authorization to request statement. A beneficiary may, before mailing a statement described in NRS 107.200 or 107.210, require the person who requested the statement to prove that he is authorized to request that statement pursuant to NRS 107.220. If the beneficiary requires such proof, he must mail the statement within 21 days after he receives that proof from the requester.
64. NRS 107.240 Grounds for refusal to deliver statement. If the debt secured by a deed of trust for which a statement described in NRS 107.210 has been requested is subject to a recorded notice of default or a filed complaint commencing a judicial foreclosure, the beneficiary may refuse to deliver the statement unless the written request for the statement is received before the publication of a notice of sale or the notice of the date of sale established by a court.
65. NRS 107.250 Reliance upon accuracy of statement and amended statement; notification of amended statement; recovery of money by beneficiary if statement is deficient.
66. 1. A person who receives a statement pursuant to NRS 107.200 or 107.210 may rely upon the accuracy of the information contained in the statement. If the beneficiary notifies the person who requested the statement of any amendment to the statement, the amended statement may be relied upon by that person in the same manner as the original statement.
67. 2. If notification of an amendment to a statement is not given in writing, a written amendment to the statement must be delivered to the person who requested the original statement not later than the next business day after notification.
68. 3. If a statement prepared by the beneficiary pursuant to NRS 107.200 does not contain the entire amount necessary to discharge the debt secured by the deed of trust and:
69. (a) A transaction has occurred which has resulted in the transfer of title or recordation of a lien; or
70. (b) A trustee’s sale or a sale supervised by a court has taken place,
71.  the beneficiary may recover that money as an unsecured debt of the grantor pursuant to the terms of the note.

72. NRS 107.260 Copy of note or deed of trust for authorized requester. If a person who is authorized pursuant to NRS 107.220 to request a statement described in NRS 107.200 or 107.210 includes in his request for such a statement a request for a copy of the note or deed of trust, the beneficiary shall mail a copy of the note or deed of trust with the statement at no additional charge.
73. NRS 107.270 Address to which request for statement must be mailed. If the beneficiary has more than one place of business, a request for a statement described in NRS 107.200 or 107.210 must be made to the address to which the periodic payments under the note are made. If no periodic payments are made under the note, the request must be mailed to the address of the beneficiary listed on the note or deed of trust.
74. NRS 107.280 Debt to which information contained in statement is applicable. Except as otherwise provided in a statement described in NRS 107.200 or 107.210, the information contained in the statement applies only to the debt secured by the deed of trust which is payable at the address to which the periodic payments are made. If periodic payments are not made under the note, the statement applies only to the entire debt secured by the deed of trust.

75. NRS 107.290 Unclear request for statement deemed to be request for amount necessary to discharge debt. If a person requests a statement described in NRS 107.200 or 107.210 and it is not clear from the request which statement is requested, the request shall be deemed a request for a statement of the amount necessary to discharge the debt secured by a deed of trust.
76. NRS 107.300 Penalty for failure to deliver statement; bar to recovery of certain damages.
77. 1. A beneficiary who willfully fails to deliver a statement requested pursuant to NRS 107.200 or 107.210 within 21 days after it is requested is liable to the person who requested the statement in an amount of $300 and any actual damages suffered by the person who requested the statement.
78. 2. A judgment awarded to a person who requested a statement pursuant to NRS 107.200 or 107.210 for failure to deliver a statement bars recovery of damages for any other failure to deliver that statement pursuant to a demand made within 6 months before or after the demand for which the judgment was awarded.
79. 3. As used in this section, “willfully” means an intentional failure to comply with the requirements of NRS 107.200 or 107.210 without just cause.
80. NRS 107.310 Fee for furnishing statement. The beneficiary may charge a fee of not more than $60 for each statement furnished pursuant to NRS 107.200 or 107.210.
81. NRS 107.311 Applicability of NRS 107.310. The provisions of NRS 107.310 do not apply to deeds of trust insured by the Federal Housing Administrator or guaranteed by the Secretary of Veterans Affairs.

How a Notice Should Look Like?
NOTICE
YOU ARE IN DANGER OF LOSING YOUR HOME!
Your home loan is being foreclosed. In 60 days your home will be sold and you will be forced to move. For help, call:

Consumer Credit Counseling _______________
The Attorney General __________________
The Division of Financial Institutions ________________
Legal Services ______________________
Your Lender ___________________
Nevada Fair Housing Center _______

How to Do Your Own Loan Audit and Find Predatory Lending?

Today, we are going to discuss rampant issue of predatory lending and how to diagnose, if you have become a victim of predatory lending. We will give you a list of red flags, and you have to outline all these areas of red flags in a separate sheet while you show your documentation to any Attorney. Remember, and read again my post about the so-called loan forensic audits. I still, truthfully do not agree with what they do. They continuously contact me and send me a “sample” forensic audit, and I consider it just a highly computerized data sheet.

I want you to save some money here. Remember, if they find any violations who is gonna sue? (Remember, who love ya baby!) Again, this is not meant to make you specialist. As usual always consult a Nevada licensed attorney. The warning signs of a predatory loan are broken down into three categories:

What Happened Before Signing?
1. What happened leading up to the signing of the loan documents?

The Marketing and Sales of Mortgage Loans
2. What happened at the closing?
3. Post closing behavior of your lender.

Now, we are going to discuss all these one by one.
1. Were you a victim of aggressive solicitation of targeted lending practices?
2. Was you steered to high rate lenders?
3. Was there any door to door solicitation of home improvement or financing arranged by contractor or mobile home dealer?
4. Was there any large fee or kickbacks promised to the mortgage broker? Remember the YSP (Yield Spread Premium)
5. Was loan made or promised to mentally incapacitated, older, retired or fixed income group?
6. Was it started as a no-doc loan?
7. Was this loan in excess of 100% loan to value ration (LTV)?

The Application Process
1. Was there any falsification on loan application?
2. Was signature forged?
3. Was co signer properly introduced into the documents?

The Loan
1. Was this a high interest rate (APR)?
2. Was there high fees and closing costs?
3. Was a balloon payment involved?
4. Was there a negative amortization?
5. Was there high appraisal costs?
6. Was there an inflated appraisal?
7. Were fees highly aggressive?
8. Was there any back dating of any documents?
9. Was there a charging of duplicative services?
10. Did it require credit insurance?
11. Was there mandatory arbitration clauses?
12. Was the loan falsely identified as a line of credit or a business loan?

The Closing

1. Was there rushed loan closing?
2. Were the terms at closing different from what the borrowers thought they would get?
3. Was there a faiure to give clients at the time of closing?
4. Was the right of cancellation properly disclosed?

After Closing
1. Was there a failure to pay off debts as promised?
2. Was there a flipping of the loan?
3. Was there a flipping of the property?
4. Was there abusive collection practices?
5. Was there any excessive prepayment penalty?
6. Was there any incomplete or inadequate home work done?

How to Handle Your Servicer?

Today, we are leaving the omnipresent lender aside, and discuss the role of the servicer. Servicer, as you may know, are not the lenders, they just service your loan. They also do an important job: they hide the real lenders from you. Servicers take out their cut and send the remaining payment to the lender. This can be clarified better if you know the traditional role of the landlord and property manager. The property manager just manages the property, takes his cut, and send the remaining amount along with the property audits and accounting to the landlord who generally is an absentee landlord. Again, your lenders may be in USA, or somewhere in Bahamas or in China. Most mortgage loans are pooled and sold to investors in the secondary market. This process is called securitization. Basically, it is little complex topic, and we may leave it for another discussion, but securitization is the root cause of our current financial problems. The loans are packaged, bundles and sold as security to various investors. Your servicer collects all the payments, maintain all necessary accounts, including escrow accounts for taxes, insurance, property taxes etc. The servicer receives a percentage of all this collection. Again, the rights to service, mortgage loans can be sold and of course purchased.

Sometimes investors like Freddie Mac and Fannie Mae enters into this game with servicers to administer the mortgages. The servicers do not hold any interest in these loans which they service. You may have noticed that the servicers very intelligently and shrewdly hide the name of the lender. There is a way to get the name of the lenders. That is a specific job and only Nevada licensed attorney should handle it.

The original of any note sold to investors must be endorsed in blank and delivered to the investor’s document custodian. The servicer is assigned the mortgage. However, the servicer is then required to assign the mortgage to the investor, but this assignment is unrecorded. Thereafter the servicer will be the mortgagee of record to ensure all those legal notices which they continuously send to borrowers.

How to Challenge the Servicers Standing to Foreclose?

This is the most crucial question, and we are going to discuss it in little bit more details here. Okay, when a foreclosure action is initiated, the servicers’ standing to bring any action mostly depends on state statues and case laws. Here, comes the tricky part. It is common for servicers to file the foreclosure action through an investor or trust is the actual holder of note and mortgage. A challenge can be very successful from a borrower where state law clearly defines who is the holder of the note, and defines the mortgage as the real party in interest. Let us say in a state for strict foreclosure, the plaintiff must prove by a preponderance of evidence that it is the owners of the note and mortgage and the borrower defaulted on the note.

The servicer has only rights to collect mortgage payments from you. It cannot foreclose on you because this is not included or generally not included in the right of assignment from the lender to servicer. In Nicholson v. Washington Mutual the court, (2001 WL 1992418 (Tex. App. Aug. 32, 2001) (not designated for publication (deed of trust must be strictly construed. There was no authority in the deed of trust for the lender to delegate these tasks to the servicer. Some other courts have also found that the servicer has a pecuniary interest in the mortgage.

What should an Attorney Do?

The attorney (again a Nevada Licensed Attorney, not an attorney-affiliated or attorney-backed, what is this is a joke, we are not biased, we tell the truth) should examine the agreement between the servicers and holder to find out the contractual rights to foreclose, or to release the interest right. However, if the servicer brings an action under its name, without disclosing the true holder of the mortgage, the foreclosure may be delayed by court and it can be asked to identify the real party in interest. (in re Viencek, 273 B.R. 354 (Bankr. N.D.Y. 2002) delay granted by Court for servicer to amend proof of claim to identify actual creditor).

More later. How bout' some discussion on MERS now? The servicers may have an economic interest, but MERS have none. MERS do not have any active interest and they don' become holder of the loans. They do not have any beneficial interest in the mortgage. They are not trustee and can be nominee only, holding title to the mortgage and but not the note. Despite these shortcomings, MERS claims that they are the nominee of the lender and has the right to foreclose in their own name. They sometime commence foreclosures and later on will assign the mortgage to a servicer if the problem arises. Several courts have questioned their rights to foreclosue or have denied their right to foreclose.

Sample Complaint/Answer against Predatory Lending (Fight Foreclosure Series)

Okay, folks as usual this is part of education services. It is not meant or a substitute for legal advice. Always contact a Nevada State Licensed Attorney for those services. This is just a sample complaint and does not constitute any attorney/client relationship.
CLARK COUNTY
NEVADA
______________________________________

Wells Fargo Home Mortgage Inc,

Plaintiff(s),

v.

XYZZ. and
YZZZ


Defendant(s).
______________________________________

)
)
)
Case No. 03CVE-12-13828


VERIFIED COUNTER COMPLAINT AND INJUNCTIVE RELIEF PURSUANT TO CIV. __________


Parties
1. Plaintiff, Wells Fargo Home Mortgage Inc., (hereinafter referred to as Plaintiff) is domiciled in the State of Nevada, City of XXXXX, herein after, also, Plaintiff.
2. Defendant, XXXX C. ZZZZZ., (hereinafter referred to as Defendant) with her residence being 2630 Street, City, State ZIP. Defendant James XXXXXX herein known by his name.
Jurisdiction and Venue
3. Jurisdiction arises under 15 USC 1640, Title 12, Regulation Z, Part 226.1(c)(3), Title 24 CFR, Regulation X, Part 3500. This court also has authority to hear Federal Law.
General Background
4. This is an action for rescission of an illegal and void Mortgage and Note to certain real estate. This purported mortgage and note and the actions taken by Defendant contain unfair trade practices and predatory lending practices.
5. Defendant also seeks recovery for damages for non-disclosure of defendants right to cancel, non-disclosure of certain Truth in Lending disclosures and Federal violations of numerous consumer rights.
6. On or about May 03, 2009, Plaintiff and Defendant purported to execute a Mortgage and Note, purported loan number 000-000000. The said purported mortgage and note were never consummated by signing therein. Plaintiff never during the duration of the purported loan transaction, within a reasonable amount of time, ever gave the defendants a signed copy of the purported mortgage and note.
7. Either before, during and/or after the settlement, Plaintiff failed and/or refused to provide defendant with copies of important documents, including the complete mortgage and note, which would explain their consumer rights, as well as other rights, including but not limited to, the right to cancel the contract and the Federal Truth in Lending Disclosures.
8. Plaintiff also intentionally failed and/or refused to provide defendant various disclosures that would indicate to defendant that the contract entered into was void and illegal. For instance, Plaintiff failed to disclose that the loan obtained had an interest rate higher than stated and in the preliminary disclosures, which preliminary disclosures were never given.
9. Plaintiffs attorney and/or settlement officer did not furnish defendant with copies of numerous important settlement documents, ever in the loans history.
10. Plaintiff caused to be filed into the records of the State of Nevada, a foreclosure with no documents purported to be the mortgage or note purported to be executed by defendant.
11. Plaintiff never during the duration of the entire purported loans history delivered upon the defendant a Notice of Default and Right to cure, with the entire accounting to show where the amounts owed were derived from.
12. Plaintiff never during the duration of the entire purported loans history delivered upon the defendant an acceleration statement, accelerating the purported loan.
13. The Plaintiffs herein and at all times relevant thereto, was under legal obligation as a fiduciary and had the responsibility of overseeing the purported loan consummation and make sure that the defendants received all mandated documentation, before and after the purported consumer transaction.
COUNT I (UNFAIR TRADE PRACTICES INVOLVING NON-COMPLIANCE, 15 USC SECTIONS 1601, ET. SEQ.)
14. The facts made above in paragraphs 1 through 13 are hereby realleged as though fully set out and incorporated by reference herein.
15. The mortgage documents were not given by Plaintiff, after the settlement had taken place, and after defendants had purported to sign the documents.
16. The above-mentioned constitutes a false representation of the settlement agreement.
17. As a direct, proximate, and foreseeable result of Plaintiffs actions, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs actions.
COUNT II (DISCLOSURE VIOLATION PURSUANT TO 15 U.S.C. 1635, ET. SEQ.) 18. The facts made above in paragraphs 1 through 17 are hereby realleged as though fully set out and incorporated by reference herein.
19. The present case credit transaction is governed by the disclosure requirements of Title 15 USC 1635.
20. The UCC 1 lien applies to the transaction under revised Article 9 and to Plaintiff, because lien rights on the property arose in favor of Plaintiff as a result of the transaction.
21. Plaintiff failed and /or refused to meet the disclosure requirements of Revised Article 9 of the UCC, by not providing the notice required or filing it before during or immediately after the settlement, as mandated under the Article.
22. Defendant is specifically in the class of persons this statute was designed to protect.
23. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notices, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT III (MISSING STATEMENTS VIOLATION, PURSUANT TO 15 U.S.C. SECTION 1635, ET. SEQ.) The facts made above in paragraphs 1 through 23 are hereby realleged as though fully set out and incorporated by reference herein.
24. The two required statements under 15 USC 1639(a) (1) (A) and (B) are completely missing.
25. Plaintiff also failed and /or refused to meet the disclosure requirements of Section 1635, by not providing the notice/disclosure or filing it before during or immediately after the settlement, as required under this statute.
26. Defendant is specifically in the class of persons this statute was designed to protect.
27. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.

COUNT IV (MISSING DISCLOSURE STATEMENTS VIOLATION, PURSUANT TO 15 U.S.C. SECTION 1638, ET. SEQ.) The facts made above in paragraphs 1 through 28 are hereby realleged as though fully set out and incorporated by reference herein.
29. The required disclosure statements are completely missing under 15 USC 1638(a)(2)(B) (a)(9), (a)(11) and (a)(12) and Regulation Z, Part 226.17 et seq.
30. Plaintiff failed and /or refused to meet the disclosure requirements of Section 1638, by not providing the disclosure or causing its filing before during or immediately after the settlement, as required under this statute.
31. Defendant is specifically in the class of persons this statute was designed to protect.
32. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT V (DISCLOSURE VIOLATIONS, PURSUANT TO TITLE 12 CODE OF FEDERAL REGULATIONS SECTION 226, ET. SEQ.) 34. The facts made above in paragraphs 1 through 33 are hereby realleged as though fully set out and incorporated by reference herein.
35. The Federal Reserve Board Interpretation, Title 12 Code of Federal Regulations Part 226, Supplement I, Paragraph 23(a)(1), provides that in the present case the transaction is rescindable for reasons above and below stated.
36. The disclosures made in relation to the consumer credit transaction were not presented in the manner required by law. Furthermore, the disclosures were not grouped together and were not segregated from everything else as required by Title 12 Code of Federal Regulations, Section 226.17(a)(1) and in this case were not given at all.
37. Defendant is specifically in the class of persons this statute was designed to protect.
38. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.

COUNT VI (RIGHT TO RECIND VIOLATIONS, PURSUANT TO TITLE 12 CODE OF FEDERAL REGULATIONS SECTION 226, ET. SEQ.) 39. The facts made above in paragraphs 1 through 38 are hereby realleged as though fully set out and incorporated by reference herein.
40. The right to rescind or cancel settlement document was unsigned by both parties, was not disclosed or given, as required by Title 12 Code of Federal Regulation, Section 226.18 et seq.
41. Defendant is specifically in the class of persons this statute was designed to protect.
42. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT VII (RIGHT TO CANCEL VIOLATIONS, PURSUANT TO TITLE 12 CODE OF FEDERAL REGULATIONS SECTION 226, ET. SEQ.) The facts made above in paragraphs 1 through 42 are hereby realleged as though fully set out and incorporated by reference herein.
43. There was no separate form to cancel, as required by Title 12 Code of Federal Regulation, Section 226 et seq.
44. Defendant is specifically in the class of persons this statute was designed to protect.
45. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT VIII (DISCEPTIVE GROUPING VIOLATIONS, PURSUANT TO TITLE 12 CODE OF FEDERAL REGULATIONS SECTION 226, ET. SEQ.)

47. The facts made above in paragraphs 1 through 46 are hereby realleged as though fully set out and incorporated by reference herein.
48. The interest disclosures were not given together with other information within the documents.
49. Defendant is specifically in the class of persons this statute was designed to protect.
50. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT IX (NO GOOD FAITH ESTIMATE VIOLATIONS, PURSUANT TO TITLE 12 CODE OF FEDERAL REGULATIONS SECTION 226, ET. SEQ.)
The facts made above in paragraphs 1 through 50 are hereby realleged as though fully set out and incorporated by reference herein
51. No good faith estimate copy was received by Plaintiff, as required by 12 Code of Federal Regulation, Section 226.18(c) and 12 USC 2601 et seq.
52. Defendant is specifically in the class of persons this statute was designed to protect.
53. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT X (CONSUMER STATEMENT MISSING VIOLATIONS, PURSUANT TO TITLE 12 CODE OF FEDERAL REGULATIONS SECTION 226, ET. SEQ.)
The facts made above in paragraphs 1 through 54 are hereby realleged as though fully set out and incorporated by reference herein.
55. A statement that the consumer should refer to the appropriate contract document and clause for information about nonpayment, default, the right to accelerate was not given, as required by Title 12 Code of Federal Regulation, Section 226.18(p).
56. Defendant is specifically in the class of persons this statute was designed to protect.
57. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice/disclosure, defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XI (DISCLOSURE VIOLATIONS, PURSUANT TO TITLE 15 U.S.C. SECTION 1601, ET. SEQ. AND REGULATION Z) The facts made above in paragraphs 1 through 58 are hereby realleged as though fully set out and incorporated by reference herein.
59. Since this action was commenced, Plaintiff has continued and so continues to violate the Consumer Credit Protection Act, Title 15 United States Code, Section 1601 et seq., and Regulation Z, Title 12 Code of Federal Regulations, Part 226, which was adopted pursuant to such Act, by failing to properly make the disclosures required by the Act and Regulation Z, as herein after more particularly set forth.
60. Defendant is specifically in the class of persons this statute was designed to protect.
61. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Defendants failure.
COUNT XII (FAILURE TO DISCLOSE CALCULATION OF MORTGAGE BALANCE, PURSUANT TO TITLE 12 CFR SECTION 226.4, ET. SEQ.) The facts made above in paragraphs 1 through 62 are hereby realleged as though fully set out and incorporated by reference herein.
63. Plaintiff failed to disclose in or with the disclosure statements, because no disclosure statements were given, the amount of the balance to which the rate was applied and an explanation of how that balance was determined and further failed to disclose the fact that the balance is determined without first deducting all credits and payments made and payments as required by Title 12 Code of Federal Regulations, Section 226.4 et seq.
64. Defendant is specifically in the class of persons this statute was designed to protect.
65. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper acceleration notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XIII (FAILURE TO DISCLOSE ITEMIZATION OF CHARGES, PURSUANT TO TITLE 12 USC 2610 ET SEQ.)
The facts made above in paragraphs 1 through 66 are hereby realleged as though fully set out and incorporated by reference herein.
67. Plaintiff failed to disclose in or with the acceleration statement the amounts, itemized and identified by type, of charges other than finance charges debited to the account during the acceleration period as required by Title 12 Code of Federal Regulations, Section 226.21.
68. Defendant is specifically in the class of persons this statute was designed to protect.
69. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XIV (INFLATION OF ACCELERATION FEES , IN VIOLATION OF TITLE 12 USC SECTION 2610, ET. SEQ.)
The facts made above in paragraphs 1 through 70 are hereby realleged as though fully set out and incorporated by reference herein.
71. Plaintiff has inflated the acceleration fees without operation of law, which amounts to usurious interest, in violation of Banking Law at 12 USC 2610 et seq.
72. Defendant is specifically in the class of persons this statute was designed to protect.
73. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XV (FAILURE TO DISCLOSE DATE, IN VIOLATION OF TITLE 12 USC SECTION 2610, ET. SEQ.)
75. The facts made above in paragraphs 1 through 74 are hereby realleged as though fully set out and incorporated by reference herein.
76. Plaintiff failed to disclose the date by which or the time period within which the new balance or any portion of the new balance must be paid to avoid additional finance charges as required by Title 12 Code of Federal Regulations, Section 226.18(p).
77. Defendant is specifically in the class of persons this statute was designed to protect.
78. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XVI (FAILURE TO PROVIDE COPIES OF MORTGAGE, IN VIOLATION OF 15 USC SECTION 1601, ET. SEQ.)
The facts made above in paragraphs 1 through 78 are hereby realleged as though fully set out and incorporated by reference herein.
79. Plaintiff failed to give to Defendant signed copies of the complete mortgage as required by 15 USC 1601 et seq. within a reasonable amount of time or never during the entire period of the Loan Agreement.
80. Defendant is specifically in the class of persons this statute was designed to protect.
81. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XVII (FAILURE TO OBTAIN SIGNED LOAN DOCUMENTS , IN VIOLATION OF 15 USC SECTION 1601, ET. SEQ.AND TITLE 12, REGULATION Z, PART226 ET. SEQ.) The facts made above in paragraphs 1 through 82 are hereby realleged as though fully set out and incorporated by reference herein.
83. Plaintiff failed to give the required sentences in various loan documents and have signed by the Defendant, as required by 15 USC 1601 et seq. and Title 12, Regulation Z, Part 226 et seq.
84. Defendant is specifically in the class of persons this statute was designed to protect.
85. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XVIII (FAILURE TO DISCLOSE USE OF SETTLEMENT FEES IN VIOLATION OF TITLE 12, REGULATION Z AND 15 USC SECTION 1601, ET. SEQ. The facts made above in paragraphs 1 through 86 are hereby realleged as though fully set out and incorporated by reference herein.
87. Plaintiff failed to disclose to the Defendant that the settlement fees could not be a part of the amount financed as required by Title 12, Regulation Z and 15 USC 1601 et seq.
88. Defendant is specifically in the class of persons this statute was designed to protect.
89. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XIX (FAILURE TO DISCLOSE LOWER INTERST RATE, IN VIOLATION OF 12 USC SECTION 2601, ET. SEQ.)
The facts made above in paragraphs 1 through 90 are hereby realleged as though fully set out and incorporated by reference herein.
91. Plaintiff (s) failed to disclose to Defendant that the loan obtained has an interest rate higher than the rate reflected in the Preliminary Disclosures and do not fall within the tolerances as required by 12 USC 2601 et seq.
92. Defendant is specifically in the class of persons this statute was designed to protect.
93. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XX (FAILURE TO DISCLOSE LOAN ORGINATION FEE, IN VIOLATION OF 12 USC SECTION 2601, ET. SEQ.)
The facts made above in paragraphs 1 through 94 are hereby realleged as though fully set out and incorporated by reference herein.
95. Plaintiff failed to disclose to Defendant that the loan obtained required loan origination fees, whereas the Preliminary Disclosures reflected no such fees as required by 12 USC 2601 et seq.
96. Defendant is specifically in the class of persons this statute was designed to protect.
97. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property, loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XXI (FAILURE TO GIVE 3 DAY COOLING PERIOD, IN VIOLATION OF 15 USC SECTION 1601, ET. SEQ. AND REGULATION Z)
The facts made above in paragraphs 1 through 98 are hereby realleged as though fully set out and incorporated by reference herein.
99. Plaintiff failed to give Defendant the required 3 day cooling off period, as required by Regulation Z and 15 USC 1601 et seq.
100. Defendant is specifically in the class of persons this statute was designed to protect.
101. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper disclosure, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XXII (FAILURE TO GIVE CONSPICUOUS WRITINGS, IN VIOLATION OF 15 USC SECTION 1601, ET. SEQ. AND TITLE 12 CODE OF FEDERAL REGULATIONS, SECTION 226.18
The facts made above in paragraphs 1 through 102 are hereby realleged as though fully set out and incorporated by reference herein.
103. By reason of the foregoing, Plaintiff has failed to make the disclosures required by 15 USC 1601 et seq. and Title 12 Code of Federal Regulations, Section 226.18, clearly and conspicuously in writing, in a form that Defendants could keep as required by 15 USC 1601 et seq. and Title 12, Code of Federal Regulations, Section 226.18. As a proximate result of the foregoing, the Defendant herein has the right to rescind the entire transaction.
104. Defendant is specifically in the class of persons this statute was designed to protect.
105. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XXIII (FAILURE TO GIVE PROPER NOTICE OF DEFAULT AND RIGHT TO CURE AND ACCELERATION NOTICE, IN VIOLATION OF 12 USC 2601 ET SEQ, 15 USC SECTION 1601, ET. SEQ. AND TITLE 12 CODE OF FEDERAL REGULATIONS, SECTION 226.18) The facts made above in paragraphs 1 through 108 are hereby realleged as though fully set out and incorporated by reference herein.
107. Plaintiff has further failed to give proper notice of Notice of Default and Right to Cure and acceleration of the loan transaction as required by 12 USC 2601 et seq. and 15 USC 1601 et seq.
108. Defendant is specifically in the class of persons this statute was designed to protect.
109. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XXIV (VIOLATION FAILURE TO DISCLOSE INTEREST RATE PURSUANT TO REGULATION Z, PART 226.4)
111. The facts made above in paragraphs 1 through 110 are hereby realleged as though fully set out and incorporated by reference herein.
112. Plaintiff failed to disclose beginning interest rates and the adjustable rate rider.
113. Defendant is specifically in the class of persons this statute was designed to protect.
114. As a direct, proximate, and foreseeable result of Plaintiffs failure to provide proper notice, Defendant is subject to loss of property and loss of use of property and other damages as a result of Plaintiffs failure.
COUNT XXV (INJUNCTIVE RELIEF)
The facts made above in paragraphs 1 through 114 are hereby realleged as though fully set out and incorporated by reference herein.
115. Defendant has been and will be seriously injured unless Plaintiffs foreclosure and other activities complained of are preliminarily and permanently enjoined. Defendant will suffer irreparable injury of a continuing nature that cannot be adequately calculated or compensated in money damages.
116. Defendant seeks an injunction to enjoin defendant James XXXXX from keeping relevant documents such as, complete loan package but not limit there to and to forward all relevant foreclosure documents to the defendant.
Prayer for Relief
Rescission of the entire Mortgage and note amounting to clear title to property with fixtures as a result of the aforementioned, and
118. As a result of Plaintiffs aforesaid violations, Plaintiff is liable to Defendant in an amount not less than $200.00 and up to $2000.00, for each and every violation, and
119. Damages as a result of the aforementioned violations, to be fixed and awarded by the Court, and
120. Damages for the Unfair and Deceptive Acts and Practices in the amount of $4000.00 for each and every violation, and
121. Damages in the amount of three times the interest paid and clear title to the property stemming from the usurious interest, and
122. Judgment against Plaintiff for return of the down payment, and other payments, as well as interest on the above amount, and
123. Cost of litigation as provided in Title 15 United States Code, Section 1601 et. seq., and
124. Any other relief the court deems just and proper.

Dated this day of , 2009.


_____________________________________________
E XXXXXXX
2630 Desperado Drive
Henderson, NV 00000

VERIFICATION
Notary:
I certify that I know or have satisfactory evidence that Elizabeth XXXXX is the person who appeared before me, and said person acknowledged that (he/she) signed this instrument and acknowledged it to be (his/her) free and voluntary act for the uses and purposes mentioned in the instrument.


___________________________________
Notary

____________________
My commission Expires

Complaint to Enjoin Impending Foreclosure

<em>This is a sample complaint to enjoin your impending foreclosure and it is meant for only education purposes in this foreclosure crisis facing the state of Nevada. Again, and as usual, please consult a Nevada Licensed Attorney for any further questions.

[Names of attorneys]
[Attorneys' business address]

District Court
Clark County, Nevada[Plaintiff's name],
Plaintiff,
vs.
[Defendant's name],
Defendant ))
)

) Case No.: [Case number]

[Pleading title]

COMPLAINT
Plaintiff, complaining of the defendants and in support of her motion for injunctive relief, alleges as follows:
Nature of Action
1. Plaintiff brings this action for damages and to enjoin a foreclosure proceeding instituted against her by the current holder of her mortgage loan, JJJ.P. Morgan Chase Bank. She contends that the originator of the loan in question, R & B Funding Group, Inc. acted unlawfully in connection with the origination of a mortgage loan made to her in April, 2006 by failing to comply with Nevada laws prohibiting the financing of fees in excess of five percent of the loan amount, and by failing to ensure that she was provided with financial counseling prior to consummating this “high cost” loan. Plaintiff further contends that Royal Mortgage & Financial Service Centers, Inc. which served as her mortgage broker, breached its fiduciary duty to her. Plaintiff further alleges that the practices of R & B Funding Group, Inc. as well as New Royal Mortgage & Financial Service Centers, Inc. constituted unfair and deceptive practices.
Parties
2. Plaintiff is a citizen and resident of the town of Consumerville in Las Vegas, Nevada.
3. Defendant, R & B Funding Group, Inc., D/B/A National Builders (hereinafter “R & B”) is, upon information and belief, a Nevada Corporation and originated Plaintiff’s mortgage loan together with a mortgage broker, Royal Mortgage & Financial Service Centers, Inc., pursuant to arrangements made by R & B.
4. Defendant, JJJ.P. Morgan Chase Bank (hereinafter “J.P. Morgan”), is, upon information and belief, the creditor and/or the trust administrator of a trust that is assignee of Plaintiff’s loan, or otherwise holds Plaintiff’s loan.
5. Defendant New Royal Mortgage & Financial Service Centers, Inc. (hereinafter “Royal Mortgage”), is, upon information and belief, a corporation organized under the laws of North Carolina and performed mortgage brokerage and/or loan origination services pursuant to arrangements made by R & B at times pertinent to the events referenced in this complaint.
6. Defendants XXXXXXXXXXX and XXXXXXXX are parties to this action only in their capacity as Substitute Trustees of Plaintiff’s Deed of Trust, and the only relief sought against Defendant Weld and/or Smith is injunctive relief enjoining foreclosure of the deed of trust.
Factual Allegations
7. Plaintiff Benice Consumer is an 92-year-old widow. She is in failing health and has limited understanding of financial transactions, including the instant transaction.
8. Consumer lives in a modest home on Main Road in Consumerville, in North Las Vegas, Nevada. She and her late husband purchased this home almost fifty years ago, and she has lived there ever since.
9. In the spring of 2003, Consumer’s son, Son Consumer contacted a mortgage broker about refinancing Consumer’s existing mortgage. At that time, Consumer’s home was secured by a mortgage with Bank of America, Inc.
10. On information and belief, John Consumer contacted an individual named Steve Smith, who, upon information and belief, was employed by Defendant mortgage broker Royal Mortgage.
11. Sometime in March or April 2003, XXXXXXX Smith contacted Consumer by calling her on the telephone and informed her that he would arrange for the refinancing of Plaintiff’s home loan.
12. Steve Smith took information from Plaintiff over the telephone concerning her finances, and upon information and belief, prepared loan application documents for Plaintiff in order to secure a loan with Defendant R & B.
13. At all times relevant hereto, Steve Smith was an employee and agent of defendant Royal Mortgage.
14. Upon information and belief, all contacts with Steve Smith and/or Royal Mortgage, were transacted over the telephone.
15. On approximately April 18, 2003, a loan closing was conducted in Consumer’s living room. On information and belief, a representative from the law firm of Brock, Scott & Ingersoll went to Consumer’s home and asked her to sign many documents. Upon information and belief, Defendant R & B, and not Consumer, selected this law firm to be the settlement agent in this transaction.
16. At the time that the loan closed, Consumer signed a HUD-1 Settlement Statement dated April 18, 2002, which listed the various loan related expenses.
17. The amount of the loan was $37,000.00.
18. Among the various fees charged in connection with Plaintiff’s loan included a “loan origination fee” of $395, a “mortgage broker fee” of $1424.50, a “settlement fee” of $100, a “title search” fee of $425, a “lender amount” of $35, and a “doc prep” fee of $100.
19. According to the Federal Truth-in-Lending Act Disclosure Statement signed at the closing, Consumer was to pay monthly payments of $298.50 for 30 years. The total of payments as disclosed is $107,460.00.
20. The total of points and fees paid by plaintiffs at or before the loan closing exceeded 5% of the “total loan amount,” as that term is defined by NRSXXXXXX were financed within the loan.
21. The loan was secured against title to plaintiff’s principal dwelling, located at Main Road, Consumerville, North Carolina, by a Deed of Trust which is recorded in Book 00 at Page 00 of the Orange County Registry.
22. The proceeds of the loan were primarily for personal, family, or household purposes.
23. Plaintiff was not advised that the loan was a “high cost-home loan” as defined in NRSXXXXX.
24. Upon information and belief, no party to the transaction received a certification from a counselor approved by the Nevada Housing Finance Agency verifying that plaintiff had been counseled as to the advisability of the loan transaction.
25. Plaintiff was not counseled by a counselor approved by the Nevada Housing Finance Agency as to the advisability of the loan transaction.
26. Defendant, R & B had a duty to inform plaintiff that the loan transaction was a “high-cost home loan” and, as such, that this loan required the various counseling protections and safeguards embraced by Chapter 24 of the North Carolina General Statutes.
27. Defendant, R & B breached this duty and the plaintiff was directly, proximately and foreseeably damaged by the breach of this duty.
28. Upon information and belief, defendant Royal Mortgage did not provide bona fide or legitimate mortgage broker services to plaintiff, even though plaintiff was charged $1424.50 by defendant, Royal Mortgage, for mortgage broker services.
29. The loan transaction in question was intended to refinance Plaintiff’s then existing first mortgage with Bank of America in the amount of $26,635.37, as indicated by line 1513 on the HUD-1 Settlement Statement. On information and belief, a check was disbursed by the closing agent three days after the loan closing to Bank of America, but said check was neither cashed nor applied to Plaintiff’s mortgage account at Bank of America. Bank of America did not satisfy the deed of trust, but instead continued to withdraw monthly payments from Plaintiff’s checking account and applied them to her old mortgage account. Plaintiff attempted to make payments to the servicer of the mortgage that is the subject of this action, but as money was being withdrawn from her checking account each month by Bank of America, her checks on the new mortgage bounced.
30. On or about October 17, 2002, Defendant J.P. Morgan Chase Bank as Trustee, through its substitute trustee, Defendants Weld and/or Smith, filed a foreclosure action against the plaintiff, alleging that the plaintiff is in default in payments under the terms of the April 2002 loan contract. The foreclosure action is filed as 02 SP 000.
31. Plaintiff, who is unsophisticated, did not realize the bank’s error. After getting several collection calls and letters, she finally sought the help of a social worker from the Orange County Department of Aging, who in turn sought assistance from the North Carolina Attorney General’s Consumer Protection Division. As a result of these inquiries, the closing agent resubmitted a check to Bank of America on October 29, 2002, and upon information and belief, Plaintiff’s prior mortgage was satisfied shortly thereafter.
32. Despite being apprised of the circumstances surrounding the failure of the April 2002 lender to pay off Plaintiff’s prior mortgage, the substitute trustee refused to delay or stop the foreclosure proceedings. The foreclosure hearing before the clerk was scheduled for November 18, 2002.
Count One
VIOLATION OF CHAPTER 24 OF THE Nevada (Against Defendant R & B, and against J.P. Morgan Chase Bank as

Trustee in its capacity as assignee or holder of interest in Plaintiff’s loan)
33. All paragraphs of this complaint are incorporated herein as if fully restated.
34. The loan transaction in question was: a “high-cost home loan” which did not exceed the lesser of (i) the conforming loan size limit for a single family dwelling as established by FNMA or (ii) three hundred thousand dollars; and was incurred by natural persons primarily for personal, family, or household purposes; and was secured by a deed of trust against property occupied as the borrower’s principal dwelling as defined in XXXXXXXXXX. With willful and corrupt intent, the lender, Defendant, R & B, and/or its agents, made and/or arranged the loan without the counseling required under Chapter XX of the Nevada General Statutes and specifically under XXXXXXXXXXXXThe loan was made without certification from a counselor approved by the North Carolina Housing Finance Agency that the borrowers received counseling on the advisability of the loan transaction and the appropriate loan for the borrowers. These acts and practices entitle Plaintiff to the remedies set out in XXXXXXXXX. Defendant R & B, together with Defendants J.P. Morgan, as Trustee, are liable as holders of interests in Plaintiff’s loan.
Count TwoUNFAIR AND DECEPTIVE ACTS AND PRACTICES
AS DEFINED IN NRS xxxxxxxxxxxxxxx(Against Defendant R & B, and against J.P. Morgan Chase Bank as Trustee in its capacity as assignee or holder of interest in Plaintiff’s loan)

35. All paragraphs of this complaint are incorporated herein as if fully restated.
36. Defendants’ acts as described above, and particularly those acts specifically set out in Count One, proximately damaged Plaintiff, are in and affecting commerce, violate public policy, have the capacity to deceive an ordinary consumer, are unscrupulous, immoral, and oppressive, and constitute unfair and deceptive trade practices under NRSXXXXXXXXXX1, thereby entitling Plaintiff to three times her actual damages plus a reasonable attorney’s fee pursuant to NRSXXXXX and XXX. The remedy requested pursuant to this count which relates to acts or practices described in Count One is plead in the alternative to the relief requested pursuant to Count One, as prescribed in XXXXXXE(d). Defendant R & B, together with Defendants J.P. Morgan are liable as holders of interests in Plaintiff’s loan.

Count Three
BREACH OF FIDUCIARY DUTIES(Against Defendant Royal Mortgage)
37. All paragraphs of this complaint are incorporated herein as if fully restated.
38. Defendant, Royal Mortgage, upon information and belief, was the employer of and had as its agent Steve Smith, who solicited and intentionally induced the trust, confidence and reliance of Plaintiff as her mortgage loan counselor and guide, and Smith and Royal Mortgage occupied the position of Plaintiff’s mortgage broker. The position of trust, confidence and reliance that Steve Smith and Royal Mortgage occupied with respect to Plaintiff and the position they occupied as Plaintiff’s mortgage broker created fiduciary duties owed by Smith and Royal Mortgage to Plaintiff which were breached by the conduct set forth above, that was done for the sake of self dealing and unjustified profits taken by Smith and Royal Mortgage through the broker fee of $1424.50.
39. Plaintiff is entitled to remedies that include imposition of a constructive trust upon the proceeds of the transaction as were paid to Defendant, Royal Mortgage and Steve Smith, to an order requiring disgorgement of all proceeds paid to Royal Mortgage and Smith and to other legal and equitable remedies to be imposed jointly and severally upon Defendant Royal Mortgage.
Count Four
UNFAIR AND DECEPTIVE ACTS AND PRACTICES
AS DEFINED IN NRSXXXXXXXXXX1(Against Defendant Royal Mortgage)
40. All paragraphs of this complaint are incorporated herein as if fully restated.
41. The acts of Defendant Royal Mortgage as described above, and particularly those acts specifically set out in Count Three, proximately damaged plaintiff, are in and affecting commerce, violate public policy, have the capacity to deceive an ordinary consumer, are unscrupulous, immoral, and oppressive, and constitute unfair and deceptive trade practices under N.RSXXXX, thereby entitling plaintiff to three times her actual damages plus a reasonable attorney’s fee pursuant to N.RSXXXXXXX§§ 75-16 and 7.
Request for ReliefWHEREFORE, Plaintiff requests:
1. That Plaintiff be awarded, pursuant to Count One, monetary damages in the amount of double recovery of any interest paid on this loan together with a Declaratory Order that the remaining interest due under the loan is forfeited.
2. That Plaintiff be awarded, pursuant to Count Two, three times her actual damages plus a reasonable attorney’s fee pursuant to NRSXXXXXXC.G.S. 75-16 and 75-16.1, upon the condition that the remedy pursuant to Count Two, is in the alternative to the relief requested pursuant to Count One, as may NRSXXXXXXC.G.S. 24-1.1E(d);
3. That Plaintiff be awarded, pursuant to Counts Three, an Order that Defendant Royal Mortgage disgorge and pay to Plaintiff all proceeds paid to it and by any party in connection with the transaction.
4. That Plaintiff be awarded, pursuant to Count Four, three times her actual damages plus a reasonable attorney’s fee to be paid by Defendant Royal Mortgage;
5. That the foreclosure action brought by the substitute trustees on behalf of Defendant JP Morgan Chase Bank against the Plaintiff be temporarily and preliminary enjoined pending a final adjudication of this action;
6. That the Court award such other relief as it deems just and proper;
7. That this case be tried by a jury.

This the ______ day of November, 2009.

Dated this [Date]

[Attorneys' address]
[Attorneys' names]