Mike, I see that you looked at my old Answer before I revised it. Please look at the Answer box above for my revised Answer. In case you cannot see it, I am reprinting the entire Answer again,
I cannot tell you how many countless hours of research I did over the last two days, even reading the Fair Debt Collection Practices Act. I had given up hope that I would find what I was looking for, but my mind just wouldn't let it go because this would have been the first time in 25 years of practicing law that I would have to say that I could not find the answer.
There were several things which puzzled me and did not make sense, one of them being 6 years, but could not find in what context that was used. Therefore, I had taken into consideration the items I listed below and suggested a different approach, posted my Answer, but still could not let it go. You can read the issues that were puzzling me and below them I have reprinted the Nevada Statute that I found just after I posted my other Answer, most of which I deleted and replaced with this.
1. In a Deed of Trust situation, where there is a non-judicial foreclosure and the house is sold by the Trustee, there is usually no right to any deficiency judgment. So, here, the 6 months makes sense;
2. With certain exceptions, although it is not always necessary for the first mortgagee to give notice of the sale to second mortgagees and other junior lienholders, they usually do give them notice. I cannot be sure of what the first mortgagee did, but I am almost positive that they gave notice to the second mortgagee. This would also make the 180-Day rule make more sense, i.e., if junior lienholders have notice of the sale, they should either step in to protect their interests or sue the borrower within 180 days after the first mortgagee has sold the property, or else be forever barred from taking any action;
3. Although the first mortgagee does not have to pay over any excess of sale proceeds to junior lienholders, they usually do, but in your instance, they paid it over to you and in almost the amount that the collection agency is willing to "settle" which I find very strange and not coincidental;
4. Mortgage lenders do not normally sell their accounts to collection agencies like their credit card divisions would do and as credit card companies almost always do, so I found it very odd that a collection agency is involved in a mortgage (Or, Deed of Trust) situation.
Another aspect of this situation which was also puzzling was that if the debt were enforceable, they would have the original Note and the original Deed of Trust with your address. Even though the Deed of Trust would not be worth anything since the security (house) is gone, it would still be attached and remain together with the Note. Since this would be the case, why would a collection agency make its first contact with the borrower by telephone since they would be required to verify that they met all the requirements of the Fair Debt Collection Practices Act,
The "Fair Debt Collection Practices Act" is applicable to mortgage lenders as well as credit card companies and other creditors. Section 809(a) of the Act provides that a collection agency is required to furnish the borrower with written notice within five (5) days of their first communication with the borrower, the information which I have listed below, unless it was provided in the initial communication
1. The amount of the debt;
2. The name of the creditor;
3. A statement that he will assume the debt's validity unless you dispute the debt within 30 days;
4. Send a verification or copy of the judgment if you dispute the debt within the 30 days;
5. Upon written request of the borrower, the collection agency must provide the borrower with the name and address of the original creditor.
Here is the relevant Nevada law which deals with junior lienholders (anything other than a first mortgage is a junior lienholder, including a second mortgagee); it is Nevada Revised Statutes §40.4638 and I have underlined certain parts only to call your attention to it as it relates to your situation,
NRS 40.4638 Circumstances under which action to enforce obligation is prohibited.
1. A person to whom an obligation secured by a junior mortgage or lien on real property is owed may not bring any action to enforce that obligation after a foreclosure sale of the real property which secured that obligation or a sale in lieu of a foreclosure sale if:
(a) The person is a financial institution;
(b) The real property which secured the obligation 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 sale in lieu of a foreclosure sale;
(c) The debtor or grantor used the amount of the obligation to purchase the real property;
(d) The debtor or grantor continuously occupied the real property as the debtor's or grantor's principal residence after securing the obligation; and
(e) The debtor or grantor did not refinance the obligation after securing it.
2. As used in this section, "financial institution" has the meaning ascribed to it in NRS 363A.050.
(Added to NRS by 2011, 1743)
NRS 40.4639 Period of limitation on commencement of civil action.
A civil action not barred by NRS 40.430 or 40.4638 by a person to whom an obligation secured by a junior mortgage or lien on real property is owed to obtain a money judgment against the debtor after a foreclosure sale of the real property or a sale in lieu of a foreclosure sale aftmay only be commenced within 6 months after the date of the foreclosure sale or sale in lieu of a foreclosure.
(Added to NRS by 2011, 1743)
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