Legal Question in Real Estate Law in Nevada

Absent express language in a short sale agreement releasing the lender�s right to a deficiency judgment, the lender has six (6) years to file suit against the homeowner for the difference between the loan balance and the sale price. Your attorney can explain further.

Attorney Malikowski's answer is correct in a general sense, but in 2009 the Nevada Legislature provided a new law that provides some protection to homeowners who suffer foreclosure of their primary residence. It has been argued that the provision also applies to short sales that may result in a deficiency judgment, but there are not yet any reported Nevada Supreme Court opinions of that application of the law. Several local attorneys are taking that position, and some are using it to negotiate a "waiver of rights" from the lender upon short sale, so it still may be valuable to you, unless and until the Court decides it applies ONLY to cases of foreclosure. At any rate, here is the relevant text of the statute (NRS 40.455):

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3. If the judgment creditor or the beneficiary of the deed of trust is a financial institution, the court may not award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust, even if there is a deficiency of the proceeds of the sale and a balance remaining due the judgment creditor or beneficiary of the deed of trust, if:

(a) The real property is a single-family dwelling and the debtor or grantor was the owner of the real property at the time of the foreclosure sale or trustee's sale;

(b) The debtor or grantor used the amount for which the real property was secured by the mortgage or deed of trust to purchase the real property;

(c) The debtor or grantor continuously occupied the real property as the debtor's or grantor's principal residence after securing the mortgage or deed of trust; and

(d) The debtor or grantor did not refinance the mortgage or deed of trust after securing it.

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Mr. Malikowski is absolutely correct that you need to consult a competent attorney for full and accurate advice on this issue. There are a lot of con men out there trying to make money from Nevadans' economic distress, so don't fall prey to someone making big promises that sound too good to be true. They probably are!