Selling Reno And Sparks Real Estate Blog


Will 2012 be "The Year of the Deficiency" in Nevada?

Yesterday my brain wondered this as I read Bryant Tutas’ Article on Active Rain:

5 Things A Realtor(r) Can Do To Protect Against Short Sale Liability.


In Nevada a lienholder has up to 6 years to file a deficiency if it was not waived or taken care of in the short sale process.  The Stout Law Firm Ponders this in their article:

The Right to a Deficiency Judgment In a Short Sale


Now given the fact that short sales in the Las Vegas NV Area didn’t become “sexy” until 2007.  This prompted the lil numbers girl in me to see how many short sale closings wemoney have had in our MLS since 2007 and before 2007.  It appears that our short sale field came alive around April 2003.

Short Sale Closings in the Las Vegas Area:

  • 4/21/2003-12/31/2006:  1,192 Units Closed
  • 1/1/2007-7/14/2011:  26,349 Units Closed

I think 2012 will be the pivotal year to see if the deficiencies will be filed.  This would be 5 years after we started seeing large numbers short sales closed.  This is perhaps after the former homeowners have gotten back on their feet and are no longer looking in the rear view mirror.

This is not intended to scare people but really open eyes to “how new” this is to all of us – yet it is all maturing.  It is coming to roost and 2012 will be a very telling year on how lienholders and PMI companies will react to their statute of limitations.


Thanks,  Renée Burrows 702-580-1783 Broker/Owner, REALTOR®


copyright 2006-2013 Renee Burrows, REALTOR®, Savvy Home Realty Solutions  702-966-2494

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Comment balloon 31 commentsRenée Donohue~Home Photography • July 15 2011 10:00AM


Morning Renee...great advice and something everyone doing a short sale should be aware of!

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) over 7 years ago

Very interesting, thanks for sharing!

Posted by Bonnie Jean Hart, Bonnie & Clyde Team - 25 yrs Exp - Real Estate - L (Home Smart Professionals-La Quinta, Indian Wells, Palm Desert, Indio, CA) over 7 years ago

I did not know they have 5 years to file the deficiency judgement.  That could be a surprise to a lot of people.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) over 7 years ago

Good morning Renee. This could certainly be an "eye opener" and I will certainly be keeping an eye out for any news.  Now on to read Bryant's article.

Posted by Doug Anderson, Bay Area Real Estate Views (Tucker Associates Real Estate Services) over 7 years ago

This idea should put more fear in people Renee as the banks come after people for the deficiency.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) over 7 years ago

I only did two short sales a few years ago. Not much of that in our area. I'm thankful I still have plenty of work that does not involve short sales or foreclosures.

Posted by Lizette Fitzpatrick, Lizette Realty, Lexington KY MLS - Kentucky Homes (Lizette Realty - Richmond KY) over 7 years ago

Renee - Our MLS seems behind the times because I don't think we had the short sale option until 2008 and they were already taking place well before that.  It will be very interesting to see what happens.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) over 7 years ago

Very good foresight and in your area, which is one of the most distressed in the Nation. 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 7 years ago

great points

not really in people's forefront on their decision making process

this and next year will be truly interesting

Posted by Vince McEveety (Gilleran Griffin Realty) over 7 years ago

Wow Renee. Those statistics are jaw dropping.

That is amazing!

Posted by Erica Ramus, MRE, Schuylkill County PA Real Estate (Erica Ramus - Ramus Realty Group - Pottsville, PA ) over 7 years ago

Have you heard from any of your clients that  a deficiency was filed against them after completing a short sale? Just curios!

Posted by Terrie Leighton, Reno Real Estate Agent ~ Selling Homes in Reno (Ferrari-Lund Real Estate ) over 7 years ago

Hi Diva Renee. Those stats are interesting, thanks for sharing and taking the time to do that (I was one of the 1192 closing you mentioned, MLS 644024, two lenders and a tax lien!). It will be interesting to see if lawsuits will be filed from those older closings. What people should know now, however, is that the laws were enacted this month effecting jr. lienholders rights to sue, see

See you in about an hour!

Posted by John Brassner, Broker-Owner, MBA, Las Vegas Homes for Sale (Belltree LLC) over 7 years ago

Hi Renee,

I seriously doubt if very many of these banks try for deficiency judgments due to the time and cost involved. It is certainly something to think about but new litigation is so costly. Thanks for the information.


Posted by Robert Bob Gilbert, Your Katy TX ( West of Houston) Real Estate Expert (Berkshire Hathaway HomeServices Anderson Properties) over 7 years ago

Thank goodness. .they only have 3 years in Maryland

Based on that fact and since we are talking basically about the same lenders. .very doubtful for lenders to spend thousands of dollars with local attorneys to pursue borrowers that  just lost their homes. . in this economy? no one is recuperating that fast!

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) over 7 years ago

California is a non-deficiency state, but the problem is that so many people had taken out HELOC, and those junior lienholders don’t want to give up their stakes!

Posted by Jim Frimmer, Realtor & CDPE, Mission Valley specialist (HomeSmart Realty West) over 7 years ago
Just noticed this post. I have wondered the same thing. As far as a bank coming after people years after a short sale, it will not be the banks, that dept was sold long ago to companies like Asset Acceptance Corporation which is a leading collector of Charged off consumer debt LIKE??? yep, HELOC's. I have heard this is already happening in California, where companies like AAC are waiting until the former homeowner is no longer a candidate for BK. Check out their website of course, laws are different in every state but imagine how many lawsuits are possible for real estate agents that suggested a short sale over a foreclosure where the dept could have been eliminated. I know it's no one in this thread but there are agents out there that have suggested a short sale when any real estate attorney worth his salt would have told the consumer that foreclosure was a better option. It's going to be interesting - that's for sure
Posted by Stephen Garner, Hub Media Company (Hub Media Company) over 7 years ago


Interesting comments indeed Renee. That is a lot of short sale in a short amount of time

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) over 7 years ago

I'm pulling this out of the air, but I think in Michigan, they can extend the deadline to go after deficiencies. For how long, no idea.

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) over 7 years ago

Banks can sell their deficiencies to collection companies, who can then pursue the borrowers. Hopefully there won't be much of this going around. If there is, E&O policies will be tested on a grand scale.

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) over 7 years ago

It will certainly be interesting Renee to see what the banks decide to do with these deficiencies. I read somewhere last week of a group that purchased about 20 mil in deficiencies for $150,000!!

My guess is that they will sell instead of suing. This  way they don't have to be the bad guys. They can just let the collection companies hound the borrowers for the next 20 years. Plus they don't have to sue for judgments that way.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) over 7 years ago

Renee - That could make for a very scary year for many.  Hopefully it will turn out well.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) over 7 years ago

It will be interesting.  I think a lot of these 'deficiencies' will just go to collections companies, even if they are not valid debts, even if the bank agreed to not pursue - the banks will not have to pay an attorney, the collection companies work for a percentage.

I have avoided listing short sales because of the long term liability for the agent.  And the agents who listed short sales without knowledge and/or expertise ... prime targets for lawsuits from a short sale seller who probably never understood the process to begin with.

Could get real ugly in Nevada in the next few years.

Posted by Virginia Hepp - Mesquite NV REALTOR, Mesquite NV Homes and Neighborhoods - Search MLS (ERA - Mesquite NV Homes For Sale) over 7 years ago

That's exactly why I let the attorneys handle these for me now--not only do they get the job done efficiently but, they take the liability off of the agents with regards to the deficiencies.  At least here they do.

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods ( | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) over 7 years ago

The deadline is coming because 2012 will be the year of deficiencies.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) over 7 years ago

Great post, Renee.  It seems the the mortgage holders have finally staffed up to help move these along.  But, with numbers like yours in just the Las Vegas real estate market, can you imagine how overwhelming this has been for the nationwide mortgage servicers?

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) over 7 years ago

Renee, I have been nstressing this point to many home owners and agents. I constantly hear, "Such and such bank is not pursuing deficiencies so don't worry about it (to the home owner). Guess what?? the banks did not have to decide for several more years yet!

Posted by Paddy Deighan JD PhD, Paddy Deighan J.D. Ph.D ( over 7 years ago

Good job Renee. You are right about this being so new to all of us. I do hope those folks are able to move forward with their lives with that foreclosure in their rear view mirror.


Posted by Cal Yoder, Homes For Sale in Lancaster PA - 717.413.0744 (Keller Williams Elite) over 7 years ago

Sorry this post was ignored with comments!  THank you ALL for the discussion!

Chuck #3:  It's actually 6 here in NV!

Terrie #11:  I have not heard it and I don't do short sales on the listing side.  I have heard of some isolated incidents where agents are getting sued however!  I have heard MORE of the IRS 1099C coming out in lieu of the deficiency however!

John #12:  It appears that is only for sales on or after July 1, 2011.  I am not a lawyer however :)

Stephen #16:  I am wondering the same theories that you have pointed out - great addition to the debate!

Dave #19:  TRUE!

BB #20:  I have heard of the "note" theory that goes beyond the SOL which scares the bejeesus out of me as a real estate agent.  I brought that up since you said 20 years :)

Virginia #22:  You and I both :)

AGAIN - thank you everyone else for adding to the discussion :)

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) over 7 years ago
banks are clearly beginning to target strategic walk aways for deficiencies. IMHO banks will pursue deficiencies in the years to come. There is just too much money sitting out there for them to ignore it
Posted by Paddy Deighan JD PhD, Paddy Deighan J.D. Ph.D ( over 7 years ago

It will ultimately come down to return on investment.  If a bank thinks its worth spending the money with a lawyer and time to pursue with a payoff at the send the will.  I am sure a lot of people's financials different than they were many years ago. 

Posted by Karl Falk, Summit Mitigation Services (Summit Mitigation Services) over 7 years ago


Lots of Vegas homeowners probably don't know about this and could be in for a chilling surprise.

Posted by Esko Kiuru over 7 years ago

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