Nobody wants their home to be at risk of foreclosure and the stress of losing their property can lead people to make rash and unwise decisions. With all of the economic pressure everyday Americans feel, it’s no surprise. Sometimes, when people receive a notice of default letter from their lender, they believe that there’s no recourse and they will end up losing their house no matter what they do.
This couldn’t be further from the truth. Foreclosure is a highly regulated process and if you keep your wits about you, you may be able to avoid foreclosure altogether or at least delay it. The notice of default in California is only the first step in the foreclosure process – there are still many steps your lender needs to take before they can auction off your property.
There are many ways you can avoid foreclosure and it all begins with understanding how it works. This article will explain what the notice of default is, how it works, and what you should pay special attention to if the notice is filed by your lender.
The notice of default is a public notice that is filed in the county where your home is located stating that you are in default on your mortgage. It is used to notify you that you are in breach of your mortgage contract and that the lender is initiating the formal foreclosure process.
However, in California, before the lender can file a notion of default, they need to contact you and everyone listed on the mortgage loan to explore other options to avoid foreclosure. For 30 days after contacting you, they cannot start the foreclosure process and you can meet with them (or a lawyer, advisor, etc. on your behalf) to see what can be done.
Additionally, even before the lenders contact you to explore your options and record the notice of default, they may send you letters demanding you pay what you owe. These letters are not notices of default and consequently not public record, simply standard letters warning you that you are in arrears and need to make payments to make the loan current.
A notice of default will include all information pertinent to you, your lender, the property in question, details on the nature of the default and what you can do to fix it, and what they will do if you do not take care of your debt.
In essence, it will most likely contain your and your lender’s name and address, the address of your property, the terms of the mortgage, the amount of money you owe, and what steps they will take if you don’t cure the default.
In case you don’t manage to pay what you owe within the designated 90 days, your lender can record a notice of sale – informing you and everyone else that they intend to sell your property. However, the sale cannot happen for 21 days after the notice of sale has been recorded.
Further, even if you do manage to pay what you owe within the 90 days after a notice of default has been recorded, your credit score can take a hit. A notice of default is a formal, public document, thus it is reported to the credit bureaus, which means that your credit score will likely go down.
Because a notice of default is a public document, it can be accessed by anyone and everyone. This means that you will likely be contacted by many companies and individuals who claim to be able to prevent foreclosure, if you pay them, of course.
These types of services from for-profit companies often amount to nothing, and you just end up losing more money. If you need assistance and advice, there are many government agencies and non-profit organizations that offer services to help default borrowers for free.
Again, we need to stress that just because the foreclosure has begun does not mean that your lender will take your house. There is a multitude of options available that can help you avoid it or at least delay it. One of those options is selling your property before the banks get to auction it off and ruin your credit score.
At SleeveUp Homes, we buy houses in foreclosure. Because we aren’t realtors or wholesalers, we can pay top dollar for your property. Request a cash offer and maybe you can pay any outstanding debt you have and get a fresh start with some money in your pocket.