THE LAWS THAT APPLY APPEAR TO BE AS FOLLOWS:
Nevada Constitution Art. 4, § 30. Homesteads: Exemption from forced sale; joint consent required for alienation; recording of declaration A homestead as provided by law, shall be exempt from forced sale under any process of law, and shall not be alienated without the joint consent of husband and wife when that relation exists; but no property shall be exempt from sale for taxes or for the payment of obligations contracted for the purchase of said premises, or for the erection of improvements thereon; Provided, the provisions of this Section shall not apply to any process of law obtained by virtue of a lien given by the consent of both husband and wife ...[.]
NRS 115.010 Exemption from sale on execution and from process of court; amount of exemption; exceptions; extension of exemption.
1. The homestead is not subject to forced sale on execution or any final process from any court, except as otherwise provided by subsections 2, 3 and 5, and NRS 115.090 and except as otherwise required by federal law.
2. The exemption provided in subsection 1 extends only to that amount of equity in the property held by the claimant which does not exceed $550,000 in value, unless allodial title has been established and not relinquished, in which case the exemption provided in subsection 1 extends to all equity in the dwelling, its appurtenances and the land on which it is located.
3. Except as otherwise provided in subsection 4, the exemption provided in subsection 1 does not extend to process to enforce the payment of obligations contracted for the purchase of the property, or for improvements made thereon, including any mechanic’s lien lawfully obtained, or for legal taxes, or for:
(a) Any mortgage or deed of trust thereon executed and given, including, without limitation, any second or subsequent mortgage, mortgage obtained through refinancing, line of credit taken against the property and a home equity loan;
However see this link that seems to contradict the above laws which is what the bank is referring to.
The upshot here appears to be that you could argue since the lender had reason to know that the home was located in a community property state they should have obtained your consent to secure the home as collateral. It is not your debt since you did not sign for the loan; but the collateral issue remains unclear as there is conflict between the statutes and what common law states. To me the Constitution seems pretty clear that the exemption does not apply to home improvement loans;
Still looking at this...