Effective June 1, 2010 ~ Nevada Foreclosure Mediation Rules Amended

Important Amendments to the Nevada Foreclosure Mediation Rules Become Effective June 1st, 2010 – Re:  Time for Mediation Scheduling, Broker’s Price Opinion (“BPO”) in lieu of Appraisal, & Trial Period for Loan Modifications

  

The Nevada Supreme  Court has made significant changes to the mediation rules concerning mediation time frames, lender document requirements, and loan modifications.

The amended rules require that a mediation must now take place within 135 days of the mediation program Administrator’s receipt of the trustee’s one-half of the mediation fee which is $200.  The former rule required that mediation take place within 90 days of the filing of the notice of default.

Because the borrower must elect mediation within 30 days of the service of the notice of default the practical effect of this change could mean that a mediation will be scheduled more than 165 days from the notice of default date. Of course whatever time period  the trustee takes to process and send a check to the Administrator only extends the scheduling of the mediation date.

The court has also amended the former rule requiring that the lender provide an appraisal made within 60 days of the mediation date.  The amended rule states that “The mediator may, in his or her discretion, accept a broker’s price opinion letter (BPO) in addition to or in lieu of the appraisal described in this rule.”

Providing a BPO rather than an appraisal will save a lender a significant expense.  In short sales the BPO is a standard requirement by a lender and obtained at their expense.
Although discretionary with the mediator it appears likely that a BPO will be accepted in lieu of an appraisal except in extraordinary circumstances.

A borrower seeking a loan modification is generally offered a 90-day trial period at the expiration of which the lender offers a permanent modification.  For a variety of reasons the transition from trial to permanent can result in the borrower being denied a permanent modification. The mediation rules did not allow for a mediation to be continued pending the successful completion of the trial modification.  This meant that a borrower denied a permanent modification after the trial had no recourse under the mediation program.

A new rules provides that when there is a trial modification a borrower may file a petition for judicial review in the event a permanent loan modification is denied by the lender. The petition must be filed within 15 days of the expiration date of the trial modification.

The Nevada Foreclosure Mediation program has been evolving since July 1, 2009, the date the law creating the program went into effect.  These new amendments will most likely not be the last.  However, they do show that the Supreme Court continues to monitor the effectiveness of the program to determine what steps can be taken to furthur enhance it.

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