Is Nevada an anti deficiency state?

Answer 1

Pursuant to Nevada Revised Statutes 40.451, Nevada is a deficiency state, which means that the lender may sue a homeowner after foreclosure for the amount the house sold that was less than what was owed. The homeowner will then have to pay the lender any amount that was due on the loan that was not paid off at sale. For example, if a home was purchased in 2006 for $400,000 and in 2009 it appraises for $300,000, and the homeowner cannot afford the mortgage and allows the lender to foreclose, and at the foreclosure sale the house sells for $200,000, the lender may file a lawsuit against the homeowner (known as a deficiency law suit according to statute). The deficiency law suit must be filed within six (6) months after the foreclosure sale, and the amount of the deficiency judgment is determined by a statutory formula. An appraisal is obtained to determine the actual fair market value on the date of sale. The homeowner is given a credit for the appraised value, or the sales price, whichever is greater. In the above example, even though the house only sold for $200,000, the homeowner is given credit for $300,000, therefore the deficiency judgment (the amount owed to the bank) is $100,000 - the difference between the amount owed and the market value, not the actual sales price.