Quiet Title Action ~ What Florida Home

Owners Need to Know

14 Wednesday Aug 2013
Posted by fightforeclosure.net in Affirmative Defenses, Appeal, Bans and !enders, "ounty
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"enter for .ousing Policy, #lorida, #oreclosure, &'(, &ortgage 'lectronic (egistration
%ystem, (ealty,rac, %ecuriti/ation, 0nited %tates
Quiet Title Actions! How to Force the "an#s To $rove %&
The Foreclosure 'risis
() TH* FO+*'LO,%+* '+(,(,
1 2%%0' 3*'4 5ho 3)ns -our *ote6
1. ,he %ecuriti/ation Process4
7 A. 3riginator %ells ,o *ominee 8#irst %ale9
7 B. ,he *ominee %ells ,o Depositor 8%econd %ale9
7 ". ,he Depositor %ells to the ('&2" ,rust
1 ,he ('&2" ,rust created to hold :pool; of mortgages and sell :shares; in
the ('&2" ,rust to investors.
1 A ,rustee is designated to operate the trust 8typically a ban9.
1 ,he ('&2" ,rust operates through :Byla)s; and :Pooling and %ervicing
Agreements;.
1 ,he Pooling and %ervicing Agreement outlines ho) the income from the
mortgages )ill be managed and the %ervicing Agent )ho )ill collect income
and foreclose in the event of default.
The Foreclosure 'risis
1 3ne in every 3<= housing units in the 0nited %tates )as branded )ith a foreclosure notice
recorded in December 2011, according to (ealty,rac.com. ,hat means >=0,000 Americans got a
big lump of coal in their stocing from 0ncle %crooge.
1 3ver 2,0?<,?<@ American homes are no) in foreclosure.
1 3ne in every 1<= housing units in "alifornia 8more that t)ice the national average9 received a
foreclosure notice in December, for a total of >0,@>> properties. 2n *evada, the figure )as one in
every A3 houses.
1 0%A ,oday reports that almost 1 in = children in *evada lived or live in o)neroccupied homes
that )ere lost to foreclosure or are at ris of being lost. ,he percentages are 1=B in #lorida, 1@B
for Ari/ona, and 12B for "alifornia. ,hatCs about one in eight children in "alifornia. #ive years
into the foreclosure crisis, an estimated 2.3 million children have lived in homes lost to
foreclosure.
1 (ealty,rac reports that foreclosure and ('3 8real estate+o)ned9 homes accounted for 2@
percent of all residential sales during the fourth Duarter of 2011.
1 .ere in relatively affluent Palm Beach "ounty, homeo)ners are *o. 1 in the state for the
average number of loans in foreclosure that are delinDuent. 2t has the fourth highest number of
foreclosures, @=,>2A )ith an average delinDuency of <23 days.
Florida-s Foreclosure ,tatistics
1 #lorida is leading the country in foreclosure rates.
1 #lorida metro areas dominate the top 2= list for cities )ith the )orst foreclosure rates E
including the eight highest in the nation, according to a report released ,uesday.F
1 2n all, 1? of the top 2= cities )ith the highest foreclosure rates as of &arch are #lorida cities,
according to the "enter for .ousing Policy, the research arm of the 5ashington, D.".+based
*ational .ousing "onference. F
1 5ith a 10.A percent foreclosure rate, $acsonville is raned 1>th overall, but 1@ other #lorida
cities had higher rates. &iami topped the list )ith the nationCs highest rate of 1>.2 percent. F
1 &iamiCs conventional mortgage foreclosure rate in &arch )as 1@.2 percent, )hile its subprime
rate )as 3A.1 percent. $acsonvilleCs conventional foreclosure rate )as ?.> percent )hile its
subprime rate )as 2A percent.
1 But given the fact that #lorida cities made up 1= of the 2= cities )ith the highest :serious;
mortgage delinDuency rates E either behind by A0 days behind or more or no) in foreclosure,
there could be more foreclosures in the stateCs future. And Gust lie on the foreclosure list, &iami
)as also first, )ith a delinDuency rate of 23.< percentH and $acsonville )as 1>th, )ith a rate of
1=.< percent.
Who Owns .our House/
0 (,,%* ON*! WHO OWN, .O%+ HO%,*/
7 Promissory *ote 8the :*ote;94 !oan Agreement
7 &ortgageIDeed of ,rust4 Po)er of %ale Document
7 Jrant Deed4 -ou o)n until you breach the Promissory *ote and
your !ender 8or 3thers9 use the Po)er of %ale Document to
#oreclose
7 Before %ecuriti/ation4 -our !ender held your *ote )as al)ays
the #oreclosing 'ntity.
7 After %ecuriti/ation4 *o 3ne Kno)s 5ho 3)ns -our *ote
Who Owns .our Note/
(,,%* TWO! Who Owns .our Note/
1. ,he %ecuriti/ation Process4
7 A. 3riginator %ells ,o *ominee 8#irst %ale9
7 B. ,he *ominee %ells ,o Depositor 8%econd %ale9
7 ". ,he Depositor %ells to the ('&2" ,rust
1 ,he ('&2" ,rust created to hold :pool; of mortgages and sell :shares; in
the ('&2" ,rust to investors.
1 A ,rustee is designated to operate the trust 8typically a ban9.
1 ,he ('&2" ,rust operates through :Byla)s; and :Pooling and %ervicing
Agreements;.
1 ,he Pooling and %ervicing Agreement outlines ho) the income from the
mortgages )ill be managed and the %ervicing Agent )ho )ill collect income
and foreclose in the event of default.
0 Wh1 (s There a Question/
1. ,he %ecuriti/ation Process4 *o 3ne Kno)s 5ho 3)ns -our
*ote
+ ,he 3riginal !enders #ailed to Properly Assign -our *ote to
%ubseDuent Purchasers
+ 2ncompetent Personnel
+ *o ,raining4 *o 3ne ,rained to %ell *otes Properly
+ *ever 3ccurred Before4 Prior to %ecuriti/ation DidnCt
,ransfer or %ell *otes
+ ,housands of Assignments !eft Blan
+ (emic ,rusts *ever (eceive Assignments or Possession of
*otes4 "urrent litigation
2. &ortgage 'lectronic (egistration %ystem, 2nc
1. "reated by over @@ #inancial 2nstitutions in 1AA> to Avoid the
(egistration of %ecuriti/ed &ortgages 4 %aves &illions of
Dollars in (ecordation feesH
2. Presently Being %ued in 8=9 %tates for 0nla)fully failing to pay
(ecording #ees on %ecuriti/ed &ortgage ,ransactions
1 5.A, 2% &'(% #0*",23*6
7 ,3 "A&30#!AJ' ,.' %A!' 3# -30( !3A* ,3 &0!,2P!'
'*,2,2'% 2* ,.' %'"0(2,2LA,23* P(3"'%%H
7 AM32D ('"3(D2*J #''% 3* 'M'(- %A!' 3# -30( !3A*
,3 %0B%'N0'*, P0(".A%'(%.
7 A", A% :B'*'#2"2A(-; 3# -30( D''D 3# ,(0%, 3(
:*3&2*''; 3# -30( &3(,JAJ'
What is 2*+,/
1 :&'(% is a mortgage baning OutilityC that registers
mortgage loans in a boo entry system so that P real
estate loans can be bought, sold and securiti/ed 8%imilar
to 5all %treetCs boo entry utility for stocs and bonds is
the Depository ,rust and "learinghouse.;
1 &'(% is enormous. 2t originates thousands of loans
daily and is the mortgagee of record for at least @0
million mortgages and other security documents.
1 &'(% acts as agent for the o)ner of the note. 2ts
authority to act should be sho)n by an agency
agreement. 3f course, if the o)ner is unno)n, &'(%
cannot sho) that it is an authori/ed agent of the o)ner.
+esult! "ANK, 'AN-T $+O3* TH*. OWN .O%+ LOAN
1 ,he 5all %treet $ournal Pics 0p the %cent
1 An article by *ic ,imiraos appeared in ,he 5all %treet $ournal on $une 1, 2011 7 :Bans .it
.urdle to #oreclosures.;
1 :Bans trying to foreclose on homeo)ners are hitting another roadbloc,; ,imiraos )rites, :as
some delinDuent borro)ers are successfully arguing that their mortgage companies canCt prove
they o)n the loans and therefore donCt have the right to foreclose.;
1 2f you 8or 29 try to boot a homeo)ner into the street )ithout any proof that )eCre entitled to the
property, the cops )ill loc us up. %tealing is stealing, )hether it is somebodyCs )allet or their 3+
bedroom 2+bath in the suburbs )ith t)o dogs and a id. 5hen a ban tries to steal the bungalo)
)ithout proof that they have a right to foreclose, itCs a :hurdle; or :another roadbloc.;
1 %emantics aside, this is good ne)s for all people holding grant deeds. ,his year, the $ournal
reports, cases in "alifornia, *orth "arolina, Alabama, #lorida, &aine, *e) -or, *e) $ersey,
,eQas, &assachusetts and other states have raised Duestions about )hether bans properly
demonstrated o)nership.
1 2n some cases, borro)ers are sho)ing courts that bans failed to properly assign o)nership of
mortgages after they )ere pooled into mortgage+baced securities. 2n other cases, borro)ers say
that lenders bacdated or fabricated documents to fiQ those errors.
1 :#la)ed mortgage+baning processes have potentially infected millions of foreclosures, and the
damages against these operations could be significant and tae years to materiali/e,; said %heila
Bair, chairman of
the #ederal Deposit 2nsurance "orp., in testimony to a %enate committee last month.
1 2n &arch, an Alabama court said $.P. &organ "hase R "o. couldnCt foreclose on Phyllis
.orace, a delinDuent homeo)ner in PheniQ "ity, Ala., because her loan hadnCt been properly
assigned to its o)ners
+ a trust that represents investors 7 )hen it )as securiti/ed by Bear %tearns "os. ,he mortgage
assignment sho)ed that the loan hadnCt been transferred to the trust from the subprime lender
that originated it.
The $ro4lem With 2*+,
1 #ederal banruptcy courts and state courts have found that &'(% and its member bans often
confused and misrepresented )ho o)ned mortgage notes. 2n thousands of cases, they apparently
lost or mistaenly destroyed loan documents.
1 ,he problems, at &'(% and else)here, became so severe last fall that many bans temporarily
suspended foreclosures.
1 *ot even the mortgage giant #annie &ae, an investor in &'(%, depends on it these days.
1 :5e )ould never rely on it to find o)nership,; says $anis %mith, a #annie &ae spoes)oman,
noting it has its o)n records.
1 Apparently )ith good reason. Alan &. 5hite, a la) professor at the Malparaiso 0niversity
%chool of !a) in 2ndiana, last year matched &'(%Cs o)nership records against those in the
public domain.
1 ,he results )ere not encouraging. :#e)er than 30 percent of the mortgages had an accurate
record in
&'(%,; &r. 5hite says. :2 ind of assumed that &'(% at least ept an accurate list of current
o)nership.
,hey donCt. &'(% is going to mae solving the foreclosure problem vastly more eQpensive.;
1 ,he Aransas %upreme "ourt ruled last year that &'(% could no longer file foreclosure
proceedings there, because it does not actually mae or service any loans. !ast month in 0tah, a
local Gudge made the no+lessstriing decision to let a homeo)ner rip up his mortgage and )al
a)ay debt+free. &'(% had claimed o)nership of the mortgage, but the Gudge did not recogni/e
its legal standing.
1 And, on !ong 2sland, a federal banruptcy Gudge ruled in #ebruary that &'(% could no longer
act as an :agent; for the o)ners of mortgage notes. .e acno)ledged that his decision could
erode the foundation of the mortgage business.
1 But this, $udge (obert ' Jrossman said, )as not his fault.
1 :,his court does not accept the argument that because &'(% may be involved )ith =0 percent
of all residential mortgages in the country,; he )rote, :that is reason enough for this court to turn
a blind eye to
the fact that this process does not comply )ith the la).;
Leal (ssues
1) ,*$A+AT(ON OF TH* NOT* AN5 TH* 5**5
1 2n the case of &'(%, the *ote and the Deed of ,rust are held by separate entities. ,his can
pose a uniDue problem dependent upon the court. ,he prevailing case la) illustrates the issue4
1 :,he Deed of ,rust is a mere incident of the debt it secures and an assignment of the debt
carries )ith it the security instrument. ,herefore, a Deed 3f ,rust is inseparable from the debt
and al)ays abides )ith the debt. 2t has no maret or ascertainable value apart from the obligation
it secures.
1 A Deed of ,rust has no assignable Duality independent of the debt, it may not be assigned or
transferred apart from the debt, and an attempt to assign the Deed 3f ,rust )ithout a transfer of
the debt is )ithout effect. :
1 ,his very :simple; statement poses maGor issues. ,o easily understand, if the Deed of ,rust and
the *ote are not together )ith the same entity, then there can be no enforcement of the *ote. ,he
Deed of ,rust enforces the *ote. 2t provides the capability for the lender to foreclose on a
property. 2f the Deed is separate from the *ote, then enforcement, i.e. foreclosure cannot occur.
,he follo)ing ruling summari/es this nicely.
1 2n %aQon vs .illery, "A, Dec 200>, "ontra "osta "ounty %uperior "ourt, an action by %aQon to
foreclose on a property by la)suit )as dismissed due to lac of legal standing. ,his )as because
the *ote and the Deed of ,rust )ere :o)ned; by separate entities. ,he "ourt ruled that )hen the
*ote and Deed of ,rust )ere separated, the enforceability of the *ote )as negated until reGoined.
6) 2*+, (, A NO2(N** AN5 NOT TH* HOL5*+ OF TH* NOT*
1 ,he Duestion no) becomes as to )hether a *ote 'ndorsed in Blan and transferred to different
entities does allo) for foreclosure. 2f &'(% is the foreclosing authority but has no entitlement to
payment of the money, ho) could they foreclose6 ,his is especially true if the true beneficiary
is not no)n. 5hy do 2 raise the Duestion of )ho the true beneficiary is6
1 ,.' &'(% 5'B%2,' %,A,'%P..
1 :3n &'(% loans, &'(% )ill sho) as the beneficiary of record. #oreclosures should be
commenced in the name of &'(%. ,o effectuate this process, &'(% has allo)ed each servicer
to choose a select number of its o)n employees to act as officers for &'(%.
,hrough this process, appropriate documents may be eQecuted at the servicerCs site on behalf of
&'(% by the same servicing employee that signs foreclosure documents for non+&'(% loans.
0ntil the time of sale, the foreclosure is handled in same manner as non+&'(% foreclosures. At
the time of sale, if the property reverts, the ,rusteeCs Deed 0pon %ale )ill follo)
a different procedure. %ince &'(% acts as nominee for the true beneficiary, it is important that
the ,rusteeCs Deed 0pon %ale be made in the name of the true beneficiary and not &'(%. -our
title company or &'(% officer can easily determine the true beneficiary. ,itle companies have
indicated that they )ill insure subseDuent title )hen these procedures are follo)ed.;
7) 2*+, (, TH* NO2(N** AN5 NOT TH* "*N*F('(A+.
1 ,o further reinforce that &'(% is not the true beneficiary of the loan, one need only loo at the
follo)ing *evada Banruptcy case, .a)ins, "ase *o. BK+%+0?+13=A3+!B( 8Banr.*ev.
3I31I200A9 8Banr.*ev., 200A9 7 :A :beneficiary; is defined as :one designated to benefit from
an appointment, disposition, or assignment . . . or to receive something as a result of
a legal arrangement or instrument.; B!A"KC% !A5 D2",23*A(- 1<= 8>th ed. 200@9. But it
is obvious from the &'(%C :,erms and "onditions; that &'(% is not a beneficiary as it has no
rights )hatsoever to any payments, to any servicing rights, or to any of the properties secured by
the loans. ,o reverse an old adage, if it doesnCt )al lie a duc, tal lie a duc, and Duac lie
a duc, then itCs not a duc.;
1 5hen the initial Deed of ,rust is made out in the name of &'(% as *ominee for the
Beneficiary and the *ote is made to AB !ender, there should be no issues )ith &'(% acting as
an Agent for AB !ender. .a)ins even recogni/es this as fact.
1 ,he issue does arise )hen the *ote transfers possession. ,hough the Deed of ,rust states
:beneficiary andIor successors;, the Duestion can arise as to )ho the successor is, and )hether
Agency is any longer in effect. &'(% maes the argument that the successor ,rustee is a &'(%
member and therefore Agency is still effective, and there does appear to be merit to the argument
on the face of it.,he original *ote .older, AB !ender, no longer holds the note, nor is entitled to
payment. ,herefore, that Agency relationship is terminated. .o)ever, the *ote is endorsed in
blan, and no Assignment has been made to any other entity, so )ho is the true
beneficiary6 And )ithout the Assignment of the *ote, is the Agency relationship intact6
4) 2*+, FO+*'LO,%+* $+O'*5%+*,
1 ,here, you have it. Direct from the &'(% )ebsite. ,hey admit that they
name people to sign documents in the name of &'(%. 3ften, these are
,itle "ompany employees or others that have no no)ledge of the actual
loan and )hether it is in default or not.
1 'ven )orse, &'(% admits that they are not the true beneficiary of the loan.
2n fact, it is liely that &'(% has no no)ledge of the true beneficiary of the
loan for )hom they are representing in an :Agency; relationship. ,hey
admit to this )hen they say :-our title company or &'(% officer can
easily determine the true beneficiary.
1 5hy are the "ourts Accepting &'(% as a *ominee or Agent of the
:!enders;6 ,he :beneficiary; term is erroneous. 'ven &'(% states it
is not a :beneficiary;.
1 2f so, &'(% cannot assign deeds of trust or mortgages to third parties
legally.
0 (,,%* TH+**! 5oes 2*+, have the +iht to $artici&ate in .our
Foreclosure/
7 *3. According to the &aGority of #ederal "ourt 3pinions and 'very %tate %upreme "ourt
decision )hich has addressed this 2ssue4 3regon and 5ashington %upreme "t Decisions Pending
7 'very Attorney Jeneral )ho has eQamined the legality of &'(% has determined it is illegal
business enterprise4 *e) -orH Dela)areH 3regon, 5ashington, 2dahoH )ith more to come.
S Declared 0nla)ful Business 3rgani/ation 4 8 2n re4 Agard, *o. 10+??33>, 2011 Banr. !'T2%
@>>, at =>+=A 8Banr. '.D.*.-. #eb 10, 20119
S 2n "alifornia, the federal court determined that &'(% has to have a )ritten contract )ith the
ne) noteholder in order to have the authority to appoint or assign the beneficial interest in the
note sufficient to foreclose 82n re4 Margas4 0% Dist "t, "entral Dist of "alifH "ase *o !A 0>+
10?03<+%B9.
7 $udge &ichael %imon of the 3regon #ederal "ourt has found that &'(% cannot assign its
beneficiary status in a deed of trust to a third party for foreclosure purposes due to the fact that
&'(% does not under 3regon la) have the legal authority to do so 8$ames, et al v (econstruct
,rust, et al4 0% Dist "t. "ase *o4 3411+cv+0032@+%,9.
,olutions
Q%(*T T(TL* A'T(ON,! 5e8inition
1 Duiet title action n. a la)suit to establish a partyCs title to real property
against anyone and everyone, and thus :Duiet; any challenges or claims to
the title. %uch a suit usually arises )hen there is some Duestion about clear
title, there eQists some recorded problem 8such as an old lease or failure to
clear title after payment of a mortgage9, an error in description )hich casts
doubt on the amount of property o)ned, or an easement used for years
)ithout a recorded description. An action for Duiet title reDuires description
of the property to be :Duieted,; naming as defendants anyone )ho might
have an interest 8including descendantsEno)n or unno)nEof prior
o)ners9, and the factual and legal basis for the claim of title. *otice
must be given to all potentially interested parties, including no)n and
unno)n, by publication. 2f the court is convinced title is in the plaintiff 8the
plaintiff o)ns the title9, a Duiet title Gudgment )ill be granted )hich can be
recorded and thus provide legal :good title.:
0 Q%(*T T(TL* A'T(ON,!
7 Purpose4 (eDuire All Adverse "laims to ,itle to Prove to the "ourt the
5orthiness of ,heir "laim4
7 &ortgagesIDeeds 3f ,rust4
1 5ho is the 3)ner of -our *ote6 Prove 2t
1 5ho is the Beneficiary of -our Deed of ,rustI&ortgage6 ,he 3)ner of the
*ote
1 5ho has the !egal (ight to #oreclose6
7 3*!- ,.' 35*'( 3# ,.' *3,' 2% A ,(0' B'*'#2"2A(-
7 3*!- ,.' B'*'#2"2A(- 3# ,.' &3(,JAJ' 3( D''D 3#
,(0%, 3( 2,% !'JA! ('P('%'*,A,2M' "A* #3('"!3%'
7 &'(% 2% *3, A B'*'#2"2A(-+According to its o)n 5ebsite
7 &'(% 2% *3, A !'JA! ('P('%'*,A,2M' 3# A*- ('&2" ,(0%,
U *o "ontract
U At Best &'(% has a "ontractual (elationship )ith 3riginal !ender
0 FLO+(5A Q%(*T T(TL* ,TAT%T*,9'ivil $ractice and $rocedure
0 :;)<:1 Quietin title= additional remed1)>
1 819 $0(2%D2",23*.7"hancery courts have Gurisdiction of actions by any person or corporation
claiming legal or eDuitable title to any landP. and shall determine the title of plaintiff and may
enter Gudgment Duieting the title and a)arding possession to the party entitled theretoP.
1 829 J(30*D%.75hen a person or corporation not the rightful o)ner of land has any
conveyance or other evidence of title thereto, or asserts any claim, or pretends to have any right
or title thereto, any person or corporation is the true and eDuitable o)ner of land the record title
to )hich is not in the person or corporation because of the defective eQecution of any deed or
mortgage because of the omission of a seal thereon, the lac of )itnesses, or any defect or
omission in the )ording of the acno)ledgment of a party or parties thereto, )hen the person or
corporation claims title thereto by the defective instrument and the defective instrument )as
apparently made and delivered by the grantor to convey or mortgage the real estate and )as
recorded in the county )here the land lies )hich may cast a cloud on the title of the real
o)nerP.
1 8@9 $0DJ&'*,.72f it appears that plaintiff has legal title to the land or is the eDuitable o)ner
thereof based on one or more of the grounds mentioned in subsection 829, or if a default is
entered against defendant 8in )hich case no evidence need be taen9, the court shall enter
Gudgment removing the alleged cloud from the title to the land and forever Duieting the title in
plaintiff and those claiming under him or her since the commencement of the action and
adGudging plaintiff to have a good fee simple title to said land or the interest thereby cleared of
cloud.
5*'LA+ATO+. +*L(*F
0 WHO OWN, TH* NOT*/ WHO (, *NT(TL*5 TO FO+*'LO,*/
1 #'D'(A! (0!'% 3# "2M2! P(3"'D0('4 (0!' =?. D'"!A(A,3(- $0DJ&'*,
1 2> 0.%.". V2201. (ules 3> and 3A govern a demand for a Gury trial. ,he eQistence of another
adeDuate remedy does not preclude a declaratory Gudgment that is other)ise appropriate. ,he
court may order a speedy hearing of a declaratory+Gudgment action.
1 ,he fact that a declaratory Gudgment may be granted :)hether or not further relief is or could
be prayed; indicates that declaratory relief is alternative or cumulative and not eQclusive or
eQtraordinary. A declaratory Gudgment is appropriate )hen it )ill :terminate the controversy;
giving rise to the proceeding. 2nasmuch as it often involves only an issue of la)
on undisputed or relatively undisputed facts, it operates freDuently as a summary proceeding,
Gustifying doceting the case for early hearing as on a motion, as provided for in "alifornia
8"ode "iv.Proc. 8Deering, 1A3?9 V10<2a9, &ichigan 83 "omp.!a)s 81A2A9 V13A0@9, and
Kentucy
8"odes 8"arroll, 1A329 "iv.Pract. V<3Aa739.
1 ,he :controversy; must necessarily be :of a Gusticiable nature, thus eQcluding an advisory
decree upon a hypothetical state of facts.; Ash)ander v. ,ennessee Malley Authority, 2A? 0.%.
2>>, 32=, =< %."t. @<<, @?3, >0 !.'d. <>>, <AA 81A3<9. ,he eQistence or noneQistence of any
right, duty, po)er, liability, privilege, disability, or immunity or of any fact upon )hich such
legal relations depend, or of a status, may be declared.
0 W+ON?F%L FO+*'LO,%+*!
1 5hat is a 5rongful #oreclosure Action6
1 A )rongful foreclosure action typically occurs )hen the lender starts a
Gudicial foreclosure action )hen it simply has no legal cause. 5rongful
foreclosure actions are also brought )hen the service providers accept
partial payments after initiation of the )rongful foreclosure process, and
then continue on ) i t h the f o r e c l o s u r e process. ,hese
predatory lending strategies, as )ell as other forms of misleading
homeo)ners, are illegal.
1 ,he borro)er is the one that files a )rongful disclosure action )ith the court against the service
provider, the holder of the note and if it is a non+Gudicial foreclosure, against the trustee
complaining that there )as an illegal, fraudulent or )illfully oppressive sale of property under a
po)er of sale contained in a mortgage or deed or court Gudicial proceeding. ,he borro)er can
also allege emotional distress and as for punitive damages in a )rongful foreclosure action.
0 F+A%5 'LA(2,
0 2ortae $a1ments! .ave you been paying mortgage payments to the
)rong financial institution6
1 $P &organ "hase4 Bought :Assets; of 5A&0 from #D2" in 200>
7 All &ortgage !oans from 2003+200> )ere already sold to ('&2" ,rusts
7 5hat Did "hase Ban Buy6 %ervicing "ontracts6
7 "an "hase Ban #oreclose on *otes 2t Does *ot 3)n6
1 3ne 5est Ban4 Bought :Assets; of 2ndy&ac from #D2" in 200>
7 All &ortgage !oans from 2003+200> )ere already sold to ('&2" ,rusts
7 5hat did 3ne 5est Ban Buy6 %ervicing "ontracts6
7 "an 3ne 5est #oreclose on *otes 2t Does *ot 3)n6
1 Ban of America4 Bought :%ervicing "ontracts; from "ountry)ide in 200>
7 All &ortgage !oans from 2003+200> )ere already sold to ('&2" ,rusts
7 5hat Did Ban of America Buy6 %ervicing "ontracts
7 "an Ban of America #oreclose on *otes 2t Does *ot 3)n6
0 Q%(*T T(TL* L(T(?AT(ON!
7 Potential 3utcomes4
1 Actual Nuiet ,itle4 (emoval of All !iens, 'ncumbrances,
&ortgages4
1 Principal (eduction4 &ediation or Arbitration (esulting in
%ubstantial (eduction in -our &ortgage Balance
1 Damage "laims against #inancial 2nstitutions4 Punitive Damages6
1 ,(3% and 2nGunctions4 %topping the #oreclosure Process
1 Did Default 2nsurance Pay 3ff &y &ortgage
1 Declaratory (elief4
7 5ho Do 2 Pay &y &ortgage ,o6
7 5ho "an #oreclose on &y .ouse6
'redit +eha4ilitation
1 "redit (ehabilitation
1 ,he Fair 'redit +e&ortin Act @F'+AA gives you the right to contact credit bureaus directly
and dispute items on your credit reports. -ou can dispute any and all items that are inaccurate,
untimely, misleading, biased, incomplete or unverifiable 8Duestionable items9. 2f the bureaus
cannot verify that the information on their reports is indeed correct, then those items must be
deleted.
1 Peabody!a) has created the :&ortgage Audit Plan;4
7 3btain a %ecuriti/ation Audit from Audit Pros, 2nc.
7 Peabody !a) )ill utili/e the results of your %ecuriti/ation Audit to file a
court action seeing a court order removing all negative credit reporting
items from your credit history based upon the findings of the audit.
7 0pon receipt of "ourt $udgment rendering the nullification of unla)ful
and erroneous credit references, Peabody !a) )ill send a Demand
!etter )ith the $udgment attachment to each "redit (eporting Agency
demanding retraction and removal of all negative credit references
relating to mortgage payments, foreclosures, short sales, etc.
#or a "omplete Pro %e :Do 2t -ourself; #oreclosure Defense Kit 5ith 5ell Drafted Pleadings
and %tep By %tep Juide #or %aving -our .ome Misit4 http4II))).fightforeclosure.net
Overview o8 the Foreclosure $rocess
#or informaiton on the foreclosure process, please see &ortgage #oreclosure.
How To Find Out (8 .our +ental %nit (s (n Foreclosure/
Kno)ing )hether a prospective rental property or your current rental property is in foreclosure is
very important. Although you may pay your rent consistently and on time, if your rental unit is
foreclosed upon, you may still be evicted by the ne) o)ner 8although see belo) for information
on legal protections that apply to you if your rental unit is foreclosed9.
Although state la) no) reDuires a landlord to disclose in )riting to a prospective tenant if the
property to be rented is in foreclosure, people do not al)ays comply )ith the la) and there is no
similar obligation as to current tenants. ,o find out if a rental unit is in foreclosure4
1. Go to the Clark County Assessor website;
2. In the top left corner, click on address search and then enter the address;
3. You should see a listin with the e!act address. Click on the "parcel nu#ber$ and
write it down;
%. &e!t, o to the Clark County 'ecorder website;
(. Click on the "search records$ link which is the second listin on the upper far left
side of the site;
). Click on *+arcel ,* and enter the rele-ant parcel nu#ber into the search screen
and choose to see all docu#ent types or, under "Cateory,$ select only
foreclosure docu#ents;
.. /his will i-e you your search results and should show whether or not a 0efault
has been filed, #eanin that the ho#eowner is delin1uent in their #ortae
pay#ents, and if a &otice of /rustee 2ale has been filed, #eanin that the ho#e
is oin to be sold.
T1&e o8 Notices
5hat notices you receive )ill depend on )hether you are the tenant of a rental unit going into
foreclosure or the o)ner. 2f you are the o)ner of a property going into foreclosure, clic here
8 lin to pg.9 for information on your rights and obligations.
2f you are the tenant of a residential rental unit that is in foreclosure, you should receive the
follo)ing notices depending on the stage of the foreclosure process4
$rior to the rental unit 4ein sold4
A *otice of %ale that is to be posted on the property and mailed to the tenant.
A8ter the rental unit has 4een sold or title trans8erred to the 4an#4
A8ter the a&&ro&riate notices have 4een iven and the tenant has not moved!
,he ne) o)ner of the home may serve the tenant )ith a complaint for eviction.
Tenant's Rights Following a Foreclosure Sale
Are .ou +entin a +esidence Which (s "ein Foreclosed %&on/
0nder previous *evada state la), if you )ere renting a d)elling unit )hich is foreclosed upon,
you could be served )ith a notice reDuiring you to leave )ithin 3 days. 2f you did not leave the
ne) o)ner could file an eviction action against you.
'ffective =I20I0A, a ne) federal la) grants you important ne) rights. ,he Helping Families
Save Their Homes Act of 2009, %. >A<, P.!. 111+22 includes a nation)ide A0 day pre+eviction
notice reDuirement for tenants in foreclosed properties.
Can the person, bank or other institution who buys the buildin at foreclosure #ake #e
lea-e riht away3
4hat can I do if the new owner says I ha-e to lea-e in less than 56 days3
4hat can I do if the new owner ser-es #e with a notice to lea-e within 3 days3
4hat happens if I don7t pay the new owner rent or -iolate other ter#s of #y lease3
4hat if I ha-e a lease that has #ore than 56 days left3
4hat #ust the 56 day notice say3
4hat if I do not want to stay 56 days or for the re#ainder of #y lease3
4hat if I wish to continue rentin the dwellin3
4hen should I first be infor#ed that #y dwellin is in foreclosure3
4hat can I do if the new owner ser-es #e with a su##ons and co#plaint askin a court
to e-ict #e without i-in #e notice3
4hat can I do if a sheriff or constable arri-es at #y door to e-ict #e3
4hat happens to #y security deposit3
4hat if I a# a section 8 tenant3
4hat can happen if I do not lea-e by the end of the notice period3
9ay I be e-icted after #y ho#e is sold at a foreclosure sale3
4hat #ust the new owner do prior to e-ictin #e3
I heard that a new federal law i-es #e 56 days to #o-e followin foreclosure. 0oesn7t
it protect #e3
Can I rent to a friend or a fa#ily #e#ber in to et the e!tra 56 days3
4hat can I do if I et a 3 day "notice to 1uit$3
4hat can I do if I a# ser-ed with 2u##ons and Co#plaint for :nlawful 0etainer3
4hat can I ain by filin an answer3
Can I can I ain by filin an answer3
;ow 0o I <ile An Answer3
4hat can I do if I a# also ser-ed with an order to show cause3
2hould I #o-e before the sheriff or constable locks #e out3
2a#ple =etters
'an the &ersonB 4an# or other institution who 4u1s the 4uildin at 8oreclosure ma#e me
leave riht awa1/
*o. ,he ne) o)ner needs to end your tenancy by giving you a notice to leave of at least A0+
days. 2f you have an uneQpired lease, you may be able to stay until the end of the lease.
What can ( do i8 the new owner sa1s ( have to leave in less than C< da1s/
-ou can send a letter telling the ne) o)ner about the la). %ee the sample letters at the end of
this section.
>eep a copy of the letter you send.
It #ay help to o to the post office and pay for a return receipt to #ake the new owner
sin to pro-e they ot your letter.
If you et a reen receipt sined by the new owner in the #ail, sa-e it.
-ou must also offer to pay the ne) o)ner your rent and live up to the other terms of your lease.
What can ( do i8 the new owner serves me with a notice to leave within 7 da1s/
-ou should contact a la)yer immediately. %ee legal resources.
2f you unable to contact a la)yer, call the ne) o)ner immediately. ,ell the ne) o)ner about the
la) and say that you are entitled to at least a A0 day notice. %tate that if the ne) o)ner tries to
evict you that you )ill defend based on the ne) la).
What ha&&ens i8 ( don-t &a1 the new owner rent or violate other terms o8 m1 lease/
2f you are late )ith your rent, the ne) o)ner can send you a notice giving you = days to pay,
move or file an affidavit )ith Gustice court eQplaining that that you have a legal eQcuse not to
pay. %ee .o) ,o (espond ,o An 'viction *oticeI *on+Payment of (ent lin 2f you violate
other terms of your lease the ne) o)ner can send you a notice stating that you either :cure; the
breach of the lease or move )ithin = days. 2f you donCt cure and have not moved )ithin = days,
then the ne) o)ner can send you a notice giving you = days to move or file an affidavit )ith
Gustice court eQplaining that that you have a legal eQcuse not to move. %ee .o) ,o (espond ,o
An 'viction *oticeI !ease Miolations.
What i8 ( have a lease that has more than C< da1s le8t/
2n most cases, the ne) o)ner cannot evict you until the end of the lease. ,here are t)o
eQceptions.
If the new owner wants to use your ho#e as their pri#ary residence, the new owner only
has to i-e you a 56?day notice to lea-e after they beco#e the owner.
If you do not pay your rent or -iolate other ter#s of #y lease the new owner #ay e-ict
you as described abo-e.
What must the C< da1 notice sa1/
,he ne) federal la) applies to both single family homes and large apartment compleQes. 2t also
applies to )eely as )ell as monthly rentals. 2t does not specify )hat the notice should say.
'ffective 10I1I0A, *(% @0.2== creates additional notice reDuirements for :residential 8@ units or
less9 foreclosures; of d)ellings rented by the month or longer. ,he A0 day period should be
contained in a notice of change of o)nership )hich must include a statement4
8a9 Jiving the contact information for the person to )hom rent should be paidH
8b9 *otifying you that the rental agreement )ith the previous o)ner or landlord continues in
effect through the notice period, and
8c9 *otifying you that failure to pay rent or comply )ith any other term of the agreement or
applicable la) constitutes a breach of the rental agreement and may result in eviction
proceedings.
#or larger compleQes and d)ellings of all si/es rented for periods shorter than 30 days no
specific form of notice is reDuired. #or both :residential foreclosures; and large compleQes the
notice must allo) you the time reDuired to move under the ne) federal la). 2f the ne) federal
la) is not eQtended by "ongress, state la) notice periods )ill govern.
What i8 ( do not want to sta1 C< da1s or 8or the remainder o8 m1 lease/
'ffective 10I1I0A, *(% @0.2== follo)ing :residential 8@ units or less9 foreclosures; of d)ellings
rented by the month or longer, tenants may vacate at any time during the notice period )ithout
penalty. *o record of eviction may be entered if you vacate )ithin the notice period.
2n any case, you may be able to negotiate to see )hat the ne) o)ner might offer if you agree to
move early. &any bans )hich foreclose may offer you a :cash for eys; option.
What i8 ( wish to continue rentin the dwellin/
-ou may be able to negotiate to see )hat the ne) o)ner might offer you a ne) lease or agree
that you can remain longer than A0 days.
When should ( 8irst 4e in8ormed that m1 dwellin is in 8oreclosure/
#or most tenants the A0 day notice should come as no surprise. %tarting 10I1I0A, *(% 10?
reDuires in :residential 8@ units or less9 foreclosures; that at the same time the lender serves the
o)ner 8your landlord9 )ith a :notice of default and election to sell;. that you get )ritten notice
)hich allo)s you to brea the lease and move at any time. ,his notice should come at least A0
days prior to the foreclosure sale. ,hat notice must also describe your rights and responsibilities
under *evada eviction procedures. ,he notice must be both posted on the property and mailed
to you.
,he separate notice must be in substantially the follo)ing form, )hich describes a tenantWs rights
in the event of a mortgage foreclosure.
What can ( do i8 the new owner serves me with a summons and com&laint as#in a court to
evict me without ivin me notice/
-ou should contact a la)yer immediately. %ee legal resources.
2f you unable to contact a la)yer, go to the "ler of the court on the summons and complaint
immediately. #ile an ans)er )ith the court that says the ne) o)ner failed to give the notice
reDuired by the Protecting ,enants at #oreclosure Act, Pub. !. *o. 111+22, V?02 8200A9. -ou
may obtain a form ans)er )ith instructions.
Jo to court on the date the court sets for a trial and tae )ith you4
1. the copy of your letter to the new owner,
2. the reen return receipt, if you recei-ed one,
3. the copy of the new law that is attached to this notice and
%. a copy of your lease, if you ha-e one.
What can ( do i8 a sheri88 or consta4le arrives at m1 door to evict me/
,ell the sheriff or constable that if you received no eviction notices or you )ere not served )ith a
summons and complaint. As for time to go to court to get the order evicting you set aside.
-ou should contact a la)yer immediately. %ee legal resources.
2f you unable to contact a la)yer, go to the "ler of the court on the eviction order immediately.
%ay that you )ant to file an emergency motion to vacate the eviction order.
What ha&&ens to m1 securit1 de&osit/
,he previous o)ner is reDuired by *(% 11>A.2@@ to either 8a9 return your security deposit or 8b9
transfer it to the ne) o)ner. #reDuently, ho)ever, that return or transfer does not tae place.
.o)ever, in any cases the ne) o)ner : has the rights, obligations and liabilities of the former
landlord as to any securities )hich are o)ed at the time of transfer;.
What i8 ( am a section D tenant/
-ou have all of the rights listed above regarding your lease and the reDuirement that the o)ner
give you a A0+day notice to leave.
-ou also have additional protections.
/he 2ection 8 ;ousin Assistance +ay#ent contract continues.
/he foreclosure is not a lawful reason to ter#inate your lease.
"all your %ection > )orer and tell the )orer )hat is happening. -ou can also send a letter
telling the ne) o)ner about the la). %ee the sample letters at the end of this section.
What can ha&&en i8 ( do not leave 41 the end o8 the notice &eriod/
2f you do not leave voluntarily or enter into an agreement )hich allo)s you to stay, the ne)
o)ner may evict you at the end of the notice period 8A0 days or the eQpiration of the lease9. ,o
evict you the ne) o)ner must serve you )ith a summons and complaint.
2a1 ( 4e evicted a8ter m1 home is sold at a 8oreclosure sale/
-es. After the foreclosure sale the highest bidder 8usually lender9 becomes the ne) o)ner. 2f
you do not leave voluntarily or enter into an agreement )hich allo)s you to stay, the ne) o)ner
may evict you.
What must the new owner do &rior to evictin me/
Prior to filing an eviction action )ith the court *(% @0.2== reDuires the ne) o)ner to first serve
you )ith a 3 day :notice to Duit;. 2f you do not move out )ithin 3 Gudicial days 8eQcludes
)eeends and holidays9, the ne) o)ner may serve you )ith a %ummons and "omplaint for
0nla)ful Detainer )hich ass the court for an order evicting you.
( heard that a new 8ederal law ives me C< da1s to move 8ollowin 8oreclosure) 5oesn-t it
&rotect me/
,he :.elping #amilies %ave ,heir .omes Act of 200A, %. >A<, P.!. 111+22; does not protect a
homeo)ner )ho defaults on a mortgage. 2t only protects :bona fide; tenants )ho )ere renting
from the o)ner at the time of foreclosure.
'an ( rent to a 8riend or a 8amil1 mem4er in to et the eEtra C< da1s/
0nder the :.elping #amilies %ave ,heir .omes Act of 200A, %. >A<, P.!. 111+22;, a lease or
tenancy shall be considered bona fide only if++
the #ortaor or the child, spouse, or parent of the #ortaor under the contract is not
the tenant;
the lease or tenancy was the result of an ar#s?lenth transaction; and
the lease or tenancy re1uires the receipt of rent that is not substantially less than fair
#arket rent for the property or the unit@s rent is reduced or subsidiAed due to a <ederal,
2tate, or local subsidy.
What can ( do i8 ( et a 7 da1 Fnotice to GuitH/
2f the foreclosure sale )as legitimate, you )ill need to move unless you mae an agreement )ith
the ne) o)ner )hich allo)s you to stay. #or eQample, the ne) o)ner may agree to rent the
property to you. Also to save the cost of evicting you, the ne) o)ner may agree to give you
eQtra time to move. 2f you are un)illing or unable to reach an agreement )ith the ne) o)ner
you may remain until a court orders you to move.
What can ( do i8 ( am served with ,ummons and 'om&laint 8or %nlaw8ul 5etainer/
-our basic choices are to do nothing or respond by filing an ans)er. 2f you do not file an ans)er
)ithin the time specified, the ne) o)ner may apply to the court for a default Gudgment against
you. Jenerally you have 20 days to ans)er but the ne) o)ner 8no) called the Plaintiff9 may
have obtained an order from the court :shortening the time to ans)er;. 2f so , you must file your
ans)er )ithin the shortened time or face a default. 0nder $"("P 10>, the time to ans)er may
not be shortened to less than 10 calendar days after service of the summons and complaint.
What can ( ain 41 8ilin an answer/
#iling an ans)er can get eQtra time to move if the ne) o)ner )ill not agree voluntarily. -ou
can get eQtra time 3 )ays. #irst you may get the eviction dismissed if you have a defense. #or
eQample, if the ne) o)ner failed to properly serve you )ith a 3 day notice to Duit, the court
could dismiss the eviction and force the ne) o)ner to start the process again by serving you )ith
a ne) 3 day notice. %econd, the court process including holding a hearing )ill add time. ,hird,
you may as the Gudge to delay the day that a sheriff or constable can evict you by granting :stay
of eQecution; to give you eQtra time to move.
2n unusual cases, filing an ans)er may lead to the possibility of reopening the foreclosure it self
if it )as not done legally. ,his )ill probably necessitate the services of an attorney.
'an ( lose an1thin 41 8ilin an answer/
5hen you file an ans)er, you )ill need to pay a filing fee unless the court grants a )aiver based
upon your inability to pay. 0nder *(% <A.020 and *(% <A.030. if the court ultimately decides
that the Plaintiff is entitled to evict you the court may order that you pay the PlaintiffCs costs
including attorneysC fees. ,he Plaintiff may also as the "ourt to a)ard money damages if you
damage the property 8commit :)aste;9.
How do ( 8ile an answer/
-ou may obtain a form ans)er )ith instructions.
What can ( do i8 ( am also served with an order to show cause/
2n addition to serving you )ith a %ummons and "omplaint for 0nla)ful Detainer, the Plaintiff
may also serve you )ith an order to sho) cause )hy a temporary )rit of restitution should not
be issued. A )rit of restitution is an order from the court evicting you. A temporary )rit of
restitution gives possession to the Plaintiff pending a final order at the end of the case. A
Plaintiff must post a bond to get a temporary )rit of restitution.
'Qcept for eQtraordinary circumstances, an order to sho) cause hearing to determine )hether a
temporary )rit of restitution shall issue may not occur until at least 11 calendar days after service
of a summons and complaint.
,he :sho) cause; hearing is not the trial on the merits. 0nder $"("P10?, a trial to enter a
permanent )rit evicting you can be set no earlier than 20 calendar days after service of summons
and complaint. 2f a :sho) cause; hearing is scheduled, a default Gudgment shall not be entered
until such hearing has occurred, even if the time to ans)er has passed.
-ou should appear at the hearing to tell the Gudge about any defenses )hich you have. -ou can
also reDuest a stay 8eQtra time to move if you need it9. 2f the hearing is held earlier than 20
calendar days after service of the summons and complaint on you, remind the Gudge that under
$"("P 10? a trial on the merits to enter a permanent )rit evicting must be scheduled at a later
date
,hould ( move 4e8ore the sheri88 or consta4le loc#s me out/
-es. 2f an order evicting you is entered, mae every effort to move yourself and all of your
belonging out before the sheriff or constable locs you out . 2f you cannot remove your
belongings in time, try to schedule a reasonable time to return for them. 2f you do not remove
them )ithin a reasonable time, the ne) o)ner may store them and charge you a reasonable fee.
!ater they may be sold to pay the fee.
,am&le Letters
%ample !etter for *on %ection > ,enant to %end to *e) 3)ner
Date4 SSSSSSSSSSSSSSSSS
,o4 SSSSSSSSSSSSSSSSS
SSSSSSSSSSSSSSSSS
SSSSSSSSSSSSSSSSS
Dear !andlord,
2 am )riting this letter in response to the notice of termination dated SSSSSSSSS.
,he Protecting ,enants at #oreclosure Act, Pub. !. *o. 111+22, VV ?01+?0@ 8200A9, )hich
became la) on &ay 20, 200A, applies to state eviction proceedings.
,his act reDuires that a ne) o)ner )ho too title to residential rental property through
foreclosure must honor eQisting leases until the end of the lease term.
,here are three eQceptions to this rule4 19 if there is an eQisting term lease and the ne) o)ner
)ants to occupy the foreclosed property as a personal residence before the end of the lease term,
29 if there is an eQisting term lease )ith less than A0 days to the end of the lease term, or 39 if the
eQisting lease on the foreclosed property is a month+to+month tenancy or a tenancy at )ill. 2n
each of these cases, the o)ner must provide the tenant at least A0 days notice to terminate the
tenancy.
Because the notice sent on SSSSSSSSSSdoes not comply )ith this la), 2 as that you rescind
8)ithdra)9 the notice.
%incerely,
SSSSSSSSSSSSSSSS
,enant name
%ample !etter for %ection > ,enant to send to the !andlord
8*ame and address of tenant9
8*ame and address of o)ner9
SSSSSSSSSSSSSSSSS
SSSSSSSSSSSSSSSSS
SSSSSSSSSSSSSSSSS
Date4
Dear !andlord,
2 am )riting this letter in response to the notice of termination dated SSSSSSSSS.
,he Protecting ,enants at #oreclosure Act, Pub. !. *o. 111+22, V ?02 + ?03 8200A9, that became
la) on &ay 20, 200A, applies to state eviction proceedings. ,his la) reDuires a person or entity
)ho acDuires o)nership of residential rental property through foreclosure to tae subGect to 8be
legally bound by9 the %ection > voucher lease and .ousing Assistance Payments 8.AP9 contract.
A ne) o)ner can only terminate the lease and .AP contract by giving the tenant at least A0 days
notice of termination prior to the end of the lease. 2f the %ection > lease and .AP contract have
less than A0 days remaining in their term, or if the ne) o)ner )ho taes title at foreclosure
)ants to occupy the premises as his or her personal residence, the ne) o)ner may terminate the
lease only after giving the tenant at least A0 days notice of such termination.
Because the notice sent on SSSSSSSSSSfalls short of the A0+day notice reDuired by la), 2 as that
you rescind 8)ithdra)9 the notice.
%incerely,
SSSSSSSSSSSSSSSS
,enant name
Eviction of Occupants Following a Foreclosure Sale - Landlords
;ow can the purchaser of residential property at foreclosure sale e-ict the occupants3
;ow do I know if the occupants are "bona fide$ tenants3
Can a purchaser at foreclosure sale #ake tenants lea-e riht away3
4hat is the procedure for i-in the 56?day notice3
;ow do I ser-e notice on the tenant3
4hat happens if the tenant fails to pay rent or -iolates other ter#s of the lease3
4hat if the tenant has a lease with #ore than 56 days re#ainin3
4hat if the tenant does not want to stay 56 days or for the re#ainder of the lease3
4hat happens to the tenant7s security deposit3
4hat if the occupant is a section 8 tenant3
4hat can I do if the tenant has not left -oluntarily by the end of the notice period3
After obtainin possession, what duty do I ha-e to #aintain the -acant property3
How can the &urchaser o8 residential &ro&ert1 at 8oreclosure sale evict the occu&ants/
,he ans)er depends upon )ho the occupants are. 2f you purchase a d)elling unit at a
foreclosure sale )hich is occupied by the previous o)ner 8the person )ho defaulted on the
mortgage9 you can serve the occupants under *(% @0.2== )ith a notice reDuiring them to leave
)ithin 3 days. 2f the occupants do not leave you can file a :formal eviction; action against
them. %ee How To File A FFormalH *viction Action)
2f ho)ever, the d)elling is occupied by bona fide 8legitimate9 tenants )ho )ere renting from the
previous o)ner, different rules apply. 'ffective =I20I0A, a ne) federal la) grants ne) rights to
tenants. ,he Helping Families Save Their Homes Act of 2009, %. >A<, P.!. 111+22 includes a
nation)ide A0 day pre+eviction notice reDuirement for tenants in foreclosed properties. 0nless
eQtended by "ongress, the Act eQpires on December 31, 2012.
How do ( #now i8 the occu&ants are F4ona 8ideH tenants/
,he Helping Families Save Their Homes Act of 2009 only protects :bona fide; tenants )ho )ere
renting from the o)ner at the time of foreclosure. 0nder the Act, a lease or tenancy shall be
considered :bona fide; only if++
the #ortaor or the child, spouse, or parent of the #ortaor under the contract is not
the tenant;
the lease or tenancy was the result of an ar#s?lenth transaction; and
the lease or tenancy re1uires the receipt of rent that is not substantially less than fair
#arket rent for the property or the unit@s rent is reduced or subsidiAed due to a <ederal,
2tate, or local subsidy.
'an a &urchaser at 8oreclosure sale ma#e tenants leave riht awa1/
*o. -ou must first to end the tenancy by giving a A0+day notice to leave. &oreover, if the
tenants have an uneQpired lease, they may be able to stay until the end of the lease. 2f the
occupants are not :bona fide; tenants, you may serve the occupants under *(% @0.2== )ith a
notice reDuiring them to leave )ithin 3 days. 2f the occupants do not leave you can file a :formal
eviction; action against them. %ee How To File A FFormalH *viction Action)
What is the &rocedure 8or ivin the C< da1 notice /
,he ne) federal la) applies to both single family homes and large apartment compleQes. #or
larger compleQes 8= units and more9 no specific form of notice is reDuired.
'ffective 10I1I0A, *(% @0.2== creates additional notice reDuirements for :residential 8@ units or
less9 foreclosures;. -ou must send a notice of the change of o)nership )hich must contain a
statement4
8a9 Jiving the contact information for the person to )hom rent should be paidH
8b9 *otifying the tenant that the rental agreement )ith the previous o)ner or landlord
continues in effect through the notice period, and
8c9 *otifying the tenant that failure to pay rent or comply )ith any other term of the agreement
or applicable la) constitutes a breach of the rental agreement and may result in eviction
proceedings.
#or both :residential foreclosures; and larger compleQes the notice must allo) the tenant the
time reDuired to move under the ne) federal la). 2f the ne) federal la) is not eQtended by
"ongress, state la) notice periods )ill govern.
How do ( serve the notice on the tenant/
,henotice must be served under *(% @0.2>0 in one of the three follo)ing )ays4
1. %erving the tenant personally, in the presence of a )itnessH
2. 2f the tenant is not at the rental premises, leaving a copy )ith a person of suitable
age and discretion; 8at least 1@ years old9 in )hich case a copy must also be mailed to the tenantH
or
3. 2f the tenantCs place of residence or business cannot be ascertained, or a person of
suitable age or discretion cannot be found there, you can post a copy of the notice on a
conspicuous place at the rental unit and mail a copy to the tenant. *(% @0.2>0819
Please note, that if you later must see a court order evicting the tenant, you must file a :proof of
service; )ith the court. 2f you do not have the reDuired documentation, the court may reDuire
you to start over again )ith a ne) notice. ,he :proof of service; must include either4
1. A statement, signed by the tenant and a )itness, acno)ledging that the tenant
received the notice on a specified dateH
2. A certificate of mailing issued by the 0nited %tates Postal %ervice 8certificates of
mailing issued by contract postal units )ill not suffice9H or
3. ,he endorsement of a sheriff, constable or other process server stating the time
and manner of service.
What ha&&ens i8 the tenant 8ails to &a1 rent or violates other terms o8 the rental areement
durin the notice &eriod/
During the notice period you step into the shoes of the former landlord. Both you and the tenant
have the rights and responsibilities set out in the *evada (esidential !andlord and ,enant Act at
*(% "hapter 11>A. ,herefore, if the tenant is late )ith rent, you can serve a notice giving the
tenant = days to pay, move or file an affidavit )ith Gustice court contesting the eviction. %ee
How To File A ,ummar1 *viction Action) 2f the tenant violates other terms of the rental
agreement you can serve a notice stating that the tenant must either :cure; the breach or move
)ithin = days. 2f the tenant fails to cure and has not moved )ithin = days, then you can send the
tenant a = day notice to move or file an affidavit )ith Gustice court contesting the eviction. %ee
How To File A ,ummar1 *viction Action)
What i8 the tenant has a lease with more than C< da1s remainin/
2n most cases, you cannot evict the tenant until the end of the lease. ,here are t)o eQceptions.
#irst, if you )ant to use the d)elling as your primary residence, you are reDuired to give the
tenant only a A0+day notice to leave. %econd, if the tenant fails pay rent or violate other terms of
the lease you may evict the tenant as described above.
What i8 the tenant does not want to sta1 C< da1s or 8or the remainder o8 the lease/
-ou and the tenant may negotiate for an earlier move. #or eQample, you could offer some
financial incentive to leave sooner.
%tarting 10I1I0A, *(% @0.2== allo)s the tenant of a :single family residence; to brea the lease
and move at any time after you purchased the property at foreclosure sale. A :single family
residence; means a structure that is comprised of not more than four units. 2f such tenants move
)ithin the notice period no record of eviction may be entered against them.
What ha&&ens to the tenant-s securit1 de&osit/
,he former o)ner is reDuired by *(% 11>A.2@@819 to either 8a9 return the tenantCs security
deposit or 8b9 transfer it to the ne) o)ner 8you9. #reDuently, ho)ever, that return or transfer
does not tae place. 2n any case you have the same :the rights, obligations and liabilities of the
former landlord as to any securities )hich are o)ed at the time of transfer;. %ee *(% 11>A.2@@
8198b9. ,herefore you must either pay the tenant an amount eDual to the security deposit or send
a itemi/ed list of deductions for claimed damages to the tenant )ithin 30 days under *(%
11>A.2@2829. "aution4 if you do neither the tenant may sue you for an amount eDual to double
the security deposit. %ee *(% 11>A.2@2839.
What i8 the occu&ant is a section D tenant/
A %ection > tenant has a portion of the rent paid by a public housing authority 8P.A9 pursuant to
a lease and a .ousing Assistance Payment 8.AP9 contract )ith the former o)ner. %ection >
tenants have all of the rights under the Helping Families Save Their Homes Act of 2009 listed
above. ,hey also have t)o additional protections4 819 the .AP contract continues in effect )ith
you taing the place of the previous o)ner and 829 the foreclosure is not a la)ful reason to
terminate the tenantCs lease. 2f the occupant claims to be a section > tenant, contact your local
P.A.
What can ( do i8 the tenant has not le8t voluntaril1 41 the end o8 the notice &eriod/
After the eQpiration of the notice period, you may serve the occupants )ith a %ummons and
"omplaint for 0nla)ful Detainer )hich ass the court for an order evicting them. How To File
A ,ummar1 *viction Action)
A8ter o4tainin &ossessionB what dut1 do ( have to maintain the vacant &ro&ert1/
Any vacant residential property purchased at a foreclosures sale pursuant to *(% must be
maintained in compliance )ith both local ordinances and ne) provisions of *(% "hapter 10?,
effective 10+1+0A reDuiring the purchaser to care for the eQterior of the property, including4
8a9 !imiting the eQcessive foliage )hich could lo)er property valuesH
8b9 Preventing trespassers from staying on the propertyH
8c9 Preventing mosDuito larvae from gro)ing in standing )aterH and
8d9 Preventing any other condition that creates a public nuisance.
2f the purchaser violates the la) and fails to correct the problem follo)ing notice, a civil penalty
of up to X1,000 a day may be imposed.
Obligations Of Landlords Facing A Foreclosure Sale
9ay I rent property which is the subBect of foreclosure proceedins3
9ay a tenant break a lease if the property oes into foreclosure3
2a1 ( rent &ro&ert1 which is the su4Iect o8 8oreclosure &roceedins/
-es, but you must disclose in )riting to a prospective tenant that the property to be leased is
subGect to foreclosure. A )illful violation of this reDuirement constitutes a :deceptive trade
practice; for )hich you may be sued by the prospective tenant or the Attorney Jeneral of
*evada.
2a1 a tenant 4rea# a lease i8 the &ro&ert1 oes into 8oreclosure/
%tarting 10I1I0A, *(% 10? reDuires that at the same time the trustee serves you )ith a :notice of
default and election to sell; that the tenant occupants be given )ritten notice )hich allo)s them
to either4 819 terminate the lease or rental agreement and move out or 829 remain and possibly be
subGect to eviction proceedings. ,hat notice must also describe their rights and responsibilities
under *evada eviction procedures. ,he notice must be both posted on the property and mailed
to the tenants.