A Nevada deed of trust loan was foreclosed through a trustee's sale. The property sold for $350,000, but the borrower owed $400,000 on the loan. The lender wants to pursue the borrower for the $50,000 deficiency. Under Nevada law, what must the lender do to pursue this deficiency?
Correct Answer
B) The lender must file a separate lawsuit and obtain a deficiency judgment in court within the applicable statutory period
Under Nevada law, a deficiency judgment is not automatic after a trustee's sale. If the sale proceeds are insufficient to cover the outstanding loan balance, the lender must file a separate lawsuit in court and obtain a deficiency judgment within the applicable statutory time period (generally within six months after the trustee's sale under NRS 40.455). The court may also limit the deficiency to the difference between the debt and the fair market value of the property at the time of the sale.
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Related Concepts
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
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