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The Nebraska Lawyer August 2001
Trev E. Peterson joined Knudsen
Berkheimer in 1981after graduating
from the University of Nebraska
College of Law. His areas of
practice are bankruptcy, real estate,
banking and commercial trial
practice. He is a member of the
Lincoln and Nebraska State Bar
Associations, Nebraska Association
of Bank Attorneys, Bankruptcy
Section of the NSBA, and the
American Bankruptcy Institute.
In today's economy a number people are at risk of losing their
homes through foreclosure proceedings. In Nebraska, those
proceedings generally involve the exercise of the power of
sale under a deed of trust. Since the mid-1980’s, lenders have
rarely used real estate mortgages to secure home loans in
Nebraska and judicial foreclosure of deeds of trust is very rare.2
For a discussion of the foreclosure procedure under deeds of
trust and mortgages, see Dennis Collins’ article published in the
January 2001 edition of The Nebraska Lawyer.
What options are available to clients whose home is at risk?
The options depend on how soon, or how late, the client is in
seeking legal advice. The sooner a client consults with his or
her attorney, the more likely it is that the attorney can find some
solution other than bankruptcy. However, most clients do not
contact their attorney until the sale has been set, and then expect
the attorney to perform a miracle. Options to prevent a sale
under a deed of trust include negotiating a reinstatement with
the lender, selling the house privately, or seeking a second (or
third) loan and using the proceeds to cure the default under the
first lien. There may be an option to enjoin the sale in the
unlikely event that the trustee under the trust deed has failed to
comply with the Nebraska Trust Deeds Act (the “Act”),3 and the
borrowers’ attorney should always read the trust deed; there
may be cure provisions set out in the trust deed that do not give
the lender any options about accepting a cure.4 Frequently,
however, the home loans in foreclosure are six to nine months
del