| By definition, a Notice of Default is the letter that | | | | clock is ticking so to speak, and its very |
| is filed by the lender against the borrower when | | | | important that you contact your lender as soon |
| they fail to pay their monthly mortgage | | | | as possible to try and work something out. Even |
| obligations, even after being given a grace period | | | | if you cannot afford to repay the amount you |
| to repay delinquencies. It is filed in the public | | | | are delinquent, most banks will have additional |
| records department where the property is | | | | options available to you. The bank doesn't want to |
| located. This will jumpstart the foreclosure | | | | sell your home, but you need to speak to them |
| procedures, where lenders seize the property held | | | | as soon as possible to devise a plan to get you |
| in the mortgage. | | | | back on track. |
| In some states, for example in California, the | | | | Please keep in mind that during this time you may |
| Notice of Default is usually issued when the | | | | be contacted by numerous companies offering |
| borrower is over 60 days late. When this | | | | you their "help". It's important to be aware of loan |
| happens, a 90-day period shall be given to the | | | | modification scams and fraudulent companies. |
| borrower to catch up with their delinquencies and | | | | They know that a homeowner who has just |
| file for reinstatement. A Borrower's failure to do | | | | been served with a notice of default may be |
| so will prompt the lender to initiate the notice of | | | | more vulnerable to their tactics. A common |
| default by filing and publishing it in the local | | | | foreclosure scam these companies use is when |
| newspaper for 20 days. After which, the | | | | they ask you to transfer your property over to |
| property will be put up for sale on its fair market | | | | them and they will allow you to rent it from them |
| value, either by judicial foreclosure or by power | | | | until you can repay the debt owed. Do not fall for |
| of sale to a trustee. The money raised will be | | | | this! More often than not they will strip all the |
| used to pay the lender the outstanding principal | | | | equity left in your home, and you will be left with |
| balance of the loan. If there is still enough to pay | | | | nothing. |
| the liens and other debts, they too will have their | | | | If you need to speak with a professional about |
| fair share. However, if nobody buys the property, | | | | your situation, consider contacting a HUD |
| the trustee will transfer it to the lender. | | | | Counselor at (800) 569-4287 or visit our |
| A notice of default officially starts the foreclosure | | | | government foreclosure help page for more |
| process. At this time it is important to really be | | | | resources that may be available to you. |
| proactive in your efforts to save your home. The | | | | |