Notice of Default Explained

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The foreclosure process is defined by California civil code 2924 and begins with the filing of a Notice of Default (NOD) with the county recorder.

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Once a borrower is at least 90 days behind in making mortgage payments, the lender will file a Notice of Default with the court of the county where the property is located.  The Notice of Default give the borrower official statutory notice that the foreclosure process has started.   Within 10 days, the lender will send registered or certified mail providing the borrower with notice of the recording.  It will also provide the borrower with options to cure the default.  The lender will also provide notice to any junior lien holders on the property. 

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Reinstatement

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After a Notice of Default has been filed the borrower will have at least 90 days to reinstate.  This typically includes paying off any and all past due amounts, along with interest fees, property taxes, and insurance.  During this period they lender may not take anything less than the full amount past due.  To find out the total amount past due you will need to order a reinstatement quote which will likely include the following line items

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- The current and past due payments

- All applicable late fees

- The cost of any property inspections

- The attorney/trustee fees and costs for the foreclosure procedure

- Other expenses incurred to preserve and protect the lender's interest in the property

- Any additional recording fees that my be required.

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Amount Disagreement

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If you believe the total amount due shown on the reinstatement or payoff quote is incorrect, contact the servicer, law firm and/or trustee verbally and in writing to dispute the amount. Under federal mortgage servicing regulations, you can send your servicer what's called a “Notice of Error.”

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The Notice of Error (basically, a letter) should include:

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- Your name and information that allows the servicer to identify your mortgage loan account, and

- A description of the error (like failing to provide an accurate payoff amount).

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Keep in mind that the foreclosure probably won't stop just because you have a dispute with the quote. You might want to pay the full amount, especially if it is a dispute over a small amount of money, just to ensure that the foreclosure process is halted.

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No Resolution

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If the borrower fails to bring the account current or resolve the notice of default, the lender will move forward with the next step in the foreclosure process.  This step is called a Notice of Trustee Sale.

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Keep Your Keys

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At Keep Your Keys, we understand a large default amount can be unrecoverable.   Often times, it's not the ongoing monthly payment that's an issue.  It's simply the amount needed to catch up and bring the property out of default.  We have help thousands of southern California homeowners solve this issue.  And there are never any upfront charges for our services. 

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