Receiving a notice of default can be stressful, especially if you are unsure what happens next. A Notice of Default means the foreclosure process has formally started, but it does not mean your home will be sold immediately. California has specific steps that generally take place between a Notice of Default and a foreclosure sale. Understanding these steps can help homeowners know what to expect and what options may still be available.
What Does a Notice of Default Mean?
A Notice of Default is a formal public notice that a borrower has not met the terms of their mortgage. In California, recording this notice marks the beginning of the formal nonjudicial foreclosure process.California Courts explains that, generally, homeowners have 90 days from the recording of the Notice of Default to cure the default. During this period, homeowners may also explore options such as working with their mortgage servicer on a loan modification or repayment plan.
The exact circumstances of each foreclosure can differ, so homeowners should carefully review their documents and seek appropriate professional advice.
What Happens After the Notice of Default?
The Notice of Default is only one step in the foreclosure process. If the default is not resolved, the lender may move forward with the next stage.
Generally, at least 90 days after recording the Notice of Default, the lender may record a Notice of Sale. This document provides information about the scheduled foreclosure auction, including the date, time, and location of the sale. The Notice of Sale is sometimes referred to as a notice of trustee sale because the trustee conducts the foreclosure sale.
What Is a Notice of Trustee Sale?
A notice of trustee sale signals that the property has reached a much later stage of the foreclosure process.
According to California Courts, the Notice of Sale states that the property will be sold at auction and generally provides at least 21 days’ notice before the scheduled sale. The notice must also be mailed, published, and posted according to applicable requirements.
This makes the Notice of Trustee Sale different from the Notice of Default. The first begins the formal foreclosure process, while the second announces a potential foreclosure auction.
Can You Still Sell Your Home?
In some situations, a homeowner may still be able to sell the property before a foreclosure sale. However, the timing, loan balance, liens, property value, and foreclosure status can all affect what is possible.
If selling is being considered, it is important to understand the amount needed to satisfy the mortgage and other obligations and to work with qualified professionals who can explain the current situation.
What Should You Do After Receiving a Notice?
Do not ignore a Notice of Default or other foreclosure documents. Consider these steps:
- Review the notice and identify important dates.
- Contact your mortgage servicer to discuss available options.
- Ask about loss-mitigation programs that may apply.
- Keep copies of all notices and communications.
- Get legal or housing counseling advice when needed.
- If selling the property is an option, understand the timeline before making decisions.
California Courts also warns homeowners about foreclosure rescue scams and notes that HUD-approved housing counselors may provide free assistance.
Understand Your Options Early
A Notice of Default does not mean the foreclosure sale has already happened. There are additional steps in the process, and the timeline can provide an opportunity to explore possible solutions.
If you are considering selling a property affected by foreclosure, The Acevedo Team can help you understand the real estate side of the process and discuss your options. Because foreclosure laws and individual circumstances can vary, legal or financial questions should be addressed with a qualified professional.
