If you’ve got a notice of default and want to know what the heck is going on, keep reading.
If you have missed payments on your loan, your mortgage lender will send you a notice of default. This notice acts as a demand letter allowing you time to cure the default.
Basically, a notice of default is a document that has to be filed by a lender to begin the foreclosure process. Depending on the state, a nonjudicial foreclosure process begins when the lender records this notice of default at the county recorder’s office. A notice of default is the first step to a bank or mortgage lender’s foreclosure process. It states that the borrower is behind on mortgage payments and the bank is in the process of rectifying the situation. If the mortgage is not paid up to date, the bank or lender will seize the property.
A notice of default is also known as a reinstatement period, notice of public appeal, or notice of the decision to promise public separate mortgage foreclosure.
This notice will contain information relevant to the piece of real estate in default. Some of these details may include:
- The legal description of the property
- The name and address of the borrower
- The name and address of the lender
- The action that is required to cure the default
- Details and nature of the default
- The date the lender is allowing for the final deadline
Once a lender does file a notice of default, it must be sent to anyone who has an interest in the property (any other loans, lenders, or even contractors who are owed money for work done to a property will get a copy).
This public notice of default must also be published in a newspaper and physically posted in a prominent place on the property itself. The lender may also pin a notice on the front door of the mortgaged property in some states. It’s also known as a notice of public auction or foreclosure notice.
Although this can be really embarrassing to someone going through these foreclosure proceedings, it’s actually a very important protection for consumers.
Back before US law required a notice of default, people were sometimes foreclosed on without any warning.
In fact, it’s happened even in the past few years – at least one bank has accidentally foreclosed on the wrong property and kicked people out of their house without due process or warning. It’s even happened around Houston.
The notice of default is a very important step within the foreclosure process that gives people with an interest in the property to step forward and claim their rights – before it’s too late.
If you’ve received a notice of default, don’t wait. Time is definitely of the essence, and you should take action.
Here are a few key steps you should take if you have received a notice of sale:
1) Stay calm and don’t panic.
This may sound obvious, but it’s probably the most important. Anyone in foreclosure is dealing with a lot of stress beyond just the property. These situations don’t happen overnight, and they take a while to solve. You’ll get through it by practicing good coping techniques and taking good care of yourself and your family. Panic leads to bad decisions, so stay cool.
2) Educate yourself.
Learn everything you can about the foreclosure process in your state so that you know what’s happening and what’s coming up next. Foreclosure proceedings can vary by state, some states follow a judicial foreclosure process while others follow nonjudicial foreclosure.
3) Gather your resources.
There are also many non-profit and government resources available out there. You’ll want good legal and tax advice along the way. Definitely don’t try to do it all yourself. The foreclosure process can be very complicated for someone experiencing this for the first time.
4) Learn your options.
We’re here to help you avoid foreclosure. We buy houses with cash. We can help you with short sales and even rent-back situations so you (potentially) may be able to keep living in your home. There are many more options than you think. Your lender may even provide some options that may help.
The banks and mortgage lenders involved don’t want your property. They want money, and what you say matters a lot. You can slow down, stop the foreclosure process or avoid foreclosure altogether if you take the appropriate action.