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Notice of Default (NOD) is a notice issued to a borrower who has pledged his / her property as security under a mortgage or deed of trust that is overdue in payment. Foreclosure proceeding could be brought against the pledged property if the amount owed plus costs of preparing the legal papers for the default are not paid within a certain time. It is a formal notice to a borrower that a default has occurred and legal action could be initiated. First the lender must record a copy of the notice in the local court making the document available for public inspection before sending a copy of the same to the borrower. Usually, the borrower has a redemption period of 90 days once he / she receives the notice. It means, during those 90 days, the borrower should make sufficient payment including unpaid principal amount, interest, late payment penalties to bring the mortgage current. This article answers some of the frequently asked questions on such notices and the process on how to deal with them. I received a notice of default letter from my mortgage lender giving me 30 days time either to dispute or to pay off the full amount. What should I do in order to request a lower monthly payment and to save my house?
To lower your monthly payments, you need to get in touch with your lender. It is clearly the lender’s discretion whether to accept your request or not. The lender might agree to a change in terms of monthly payment amount or to eliminate the late fee amount. In California, does a notice of default stay in force if a lender sells the note / letter to a new lender? Or should the new lender file a new notice of default?
If the new owner of the note did not have possession of the note at the time the first NOD was filed, then the new owner of the note would have to re-file the NOD. In California, a lender must meet compliance with California Comm. Code 3-301 to establish a valid foreclosure. This needs to be done at the start of the foreclosure proceedings, the recording of the notice of default, and during the proceedings until the sale date. How long does the notice of default stay in force, if after receiving the same I file for bankruptcy and during the time the bank postpones the sale date on three occasions before finally dropping it?
In this case, the lender would not have to issue a new NOD but have to issue a new notice of sale and set a new date as soon as the bankruptcy court lifts the stay. Because, when you file for bankruptcy, the court issues a stay on the foreclosure process, the lender will have to wait till the stay order gets lifted. Does the failure to follow the requirements of Civil Code 2923.5 nullify the NOD as the borrower was never contacted or informed about a trustee sale scheduled to happen in couple of days?
Failure to follow the requirements of Civil Code 2923.5 can usually not nullify the NOD or Notice of Sale. It can temporarily postpone a trustee’s sale while the lender fulfills the requirements of the statute. The lender can go ahead with the foreclosure once he fulfils the requirements of the statute. I had a NOD filed few years ago. The bank began the foreclosure process and then I received a notice of recession. What does it mean?
A notice of recession indicates that the default has been fixed by either the arrears in payments by the borrower or through a refinance and it does cancel the NOD. Now, with a notice of recession, the borrower can sell the property as the foreclosure action was terminated. Having the right information can help when dealing with questions regarding NOD. One should always ask a bankruptcy lawyer while when unsure of one's rights or the correct legal procedure.
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