Time for lenders to pay attention to property condition as a part of the foreclosure process.

SouthLaw's Senior Attorney, Ed Brink shares important information regarding LB 151, a recent legislative bill approved by the Nebraska Legislature on February 26, 2015.  LB 151 requires the holder of a mortgage or deed of trust, or a trustee of a deed of trust, to provide the name and address of a designated PERSON that will accept service of notice of property code violations to any municipality that requests that information, in writing. While failure to provide a designated contact person, within the five business day deadline set out in the bill, does not impact the validity of a complaint for foreclosure or notice of trust deed default in any way, and the requirement to provide a designated contact person does not create a duty to maintain the property, it behooves lenders to take the designation requirement seriously. Failure to respond to this requirement in a meaningful fashion now could lead to a legislative attempt, in the not too distant future, to impose a duty on lenders to maintain properties and cure code violations before properties can be sold out of REO. Obviously, the Legislature and  municipalities in Nebraska want to make sure lenders are aware of code violations and making them responsible for those code violations might be next.

Download official bill here: LB151(2015).