Receiving a notice of default can be stressful, especially if you are unsure what happens next. The good news is that a Notice of Default does not mean your home has already been sold. It is a formal step in California’s foreclosure process, and understanding what it means can help you evaluate your next steps.
A Notice of Default generally indicates that a borrower has fallen behind on mortgage obligations. In California’s nonjudicial foreclosure process, recording this notice marks the beginning of the formal foreclosure process. California Courts explains that homeowners generally have 90 days from the recording of the Notice of Default to cure the default before the process can move forward.
What Is a Notice of Default?
A Notice of Default, often called an NOD, is a formal document stating that the borrower is in default under the loan.
The notice typically provides information about the default and the amount needed to address it. Once it has been recorded, homeowners should not ignore it.
Depending on their circumstances, homeowners may explore options such as:
- Bringing the mortgage current
- Asking the lender about loss-mitigation options
- Applying for a loan modification
- Discussing a repayment plan
- Selling the property
- Exploring a short sale when appropriate
The best option depends on the homeowner’s finances, loan, property value, and foreclosure timeline.
What Is a Notice of Trustee Sale?
A Notice of Trustee Sale, also referred to as a Notice of Sale, comes later in the foreclosure process.It provides information about a scheduled foreclosure auction, including details such as the property, trustee, sale date, time, and location. California Courts states that, generally, a foreclosure sale can take place at least 21 days after the Notice of Sale is recorded, provided applicable requirements have been met.
This makes a Notice of Trustee Sale particularly important. If you have received one, you should confirm the sale date and immediately review your available options.
Notice of Default vs. Notice of Trustee Sale
The main difference is where you are in the foreclosure process.
| Notice of Default | Notice of Trustee Sale |
| Indicates a formal default | Indicates a scheduled foreclosure sale |
| Comes earlier in the process | Comes later in the process |
| Gives the homeowner time to address the default | Means the foreclosure process has progressed further |
| May provide an opportunity to explore several solutions | Requires prompt attention because a sale date may be scheduled |
A Notice of Default should not be treated as a foreclosure sale. However, it is a signal that action is needed.
Can You Sell Your Home After a Notice of Default?
In many circumstances, a homeowner can still sell a property after receiving a Notice of Default.
Whether a sale is realistic depends on factors such as the home’s market value, mortgage balance, other liens, selling costs, and the amount of time remaining before foreclosure.
If the home has sufficient equity, a traditional sale may be one option to investigate. If the property is worth less than the amount owed, a short sale may be another possibility, subject to lender approval and the circumstances of the loan.
Selling the property does not automatically stop foreclosure, so homeowners should understand the actual foreclosure timeline and communicate with the mortgage servicer.
What Should You Do After Receiving a Notice?
Start by reviewing the notice and recording all important dates. Contact your mortgage servicer to ask about the current amount required to cure the default and available loss-mitigation options.
You can also speak with a HUD-approved housing counselor for free foreclosure assistance.
If selling may be an option, a real estate professional can help you understand the property’s potential market value and estimated selling proceeds.
The Acevedo Team works with Southern California homeowners facing challenging real estate situations, including potential foreclosure. Understanding your property’s value and available options can help you make a more informed decision about what to do next.