A Nevada homeowner declared a homestead exemption under NRS Chapter 115 on her primary residence, protecting $605,000 in equity. She later defaulted on her first deed of trust loan. The lender initiates a non-judicial foreclosure through a trustee's sale. Which of the following correctly describes the effect of the homestead exemption in this situation?
Correct Answer
B) The homestead exemption does not protect against foreclosure on a deed of trust, so the trustee's sale may proceed unimpeded
Under NRS Chapter 115, Nevada's homestead exemption protects up to $605,000 of a homeowner's equity from forced sale by general creditors (such as judgment creditors). However, the homestead exemption explicitly does NOT protect against foreclosure on a deed of trust, mortgage, or HOA lien. When a lender forecloses on a deed of trust, the homestead exemption is irrelevant and does not impede the trustee's sale in any way. This is a critical distinction: the exemption protects against judgment creditors, not consensual liens like deeds of trust.
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