California Notice of Default - Flowchart / Timeline
Day 1 : Notice of Default is recorded
Within 10 Business Days: Notice of Default mailed to trustors and Special Requests for Notice
Within 1 Month from date of recordation of the NOD: Mail Notice of Default Trustor to all required parties under 29246 (c) (2)
After 3 months: Trustee's sale date can be set
25 days prior to sale date: Notice to IRS must be given if required
20 days prior to sale date: -- Publish Notice of Sale in local paper at least once each week for 3 consecutive weeks with the first date of publication at least 20 days before date of sale. -- Post Notice of Sale. -- Mail Notice of Sale to all parties who were sent the NOD - including any state agency
Within 10 days from 1st publication Notice: Request for directions of property sent to beneficiary (if no known designated property address)
14 days prior to sale date: Record Notice of Sale at County Recorders Office
7 days prior to sale date: Trustee cannot sell for 7 days after expiration of court order
5 business days prior to sale: Right of borrower to reinstate ends
Sale date: Public Auction, approximately 120 days from mail/post date of Notice of Default. Sold at Trustee's Sale. Property is sold to highest bidder.
YOUR Immediate Action is Required
Early in the default process you can still come back from the brink if you haven't missed more than 1 or 2 monthly payments and your lender hasn't spent too much trying to get you back in line.
Remember, the foreclosure fees start to increase as the process goes on. This is why it is so important to not let this go on. As soon as you know that you are falling behind, let your lender know. No one wants to talk to their lender about missed payments, but it can be one of the most important steps you take. The longer you wait, the more difficult it becomes to solve your problem.
Lender's time chart (keep in mind not all lenders work the same)
16 days late Lender will try to get in touch with you and figure out a way to bring the payments current.
30 days late Lender's collection attempts gets aggressive
90 to 100 days late Lender will refer the mortgage to an attorney or other representative,
who will initiate the formal foreclosure process.
90 to 120 days late Lender will record your delinquency as a public notice of default. Two
things then happen. The foreclosure department is moving as quickly
as possible to get to the foreclosure sale and the "loss mitigation"
department is working with you to try to do a workout.
It is up to you to take the necessary actions to get back on track with the lender. Never ignore your problem, you must take ACTION.
the Mother and Daughter Realty Team
Question: How does a home go into foreclosure?
Answer:
Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. Unless the debt is satisfied, the lender will foreclose on the mortgage and proceed to set up a trustee sale.
Question: Can a home seller sell a home for less than its mortgage?
Answer:
Yes, in some case you can sell your home for less than what you still owe on the mortgage. But it is complicated and depends on the lender. This situation is known as a "short sale." Sometimes a lender will be willing to split the difference between the sale price and loan amount, which still must be paid.
A short sale may be more complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Freddie Mac, the two major secondary-market players.
If the loan was a low down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.
Question: How does someone sell a slow mover?
Answer:
Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home. If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired. Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet.
Another option is to pull your house off the market and wait for the market to improve.
Finally, if you who have no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of- foreclosure with your lender.
A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.
In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.
Question: When does foreclosure begin?
Answer:
Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the buyer in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction.
A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale.
Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.
Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
Consultation with an accountant and/or attorney is recommended before entering into any financial transaction.
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F: 866-815-1649
Question and Answers:
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Notice of Default: (NOD, ND) A publicly recorded notice that a property owner has missed scheduled loan payments for a loan secured by a property.
Trustee's Sale: (NOT, NT) A document announcing the public sale of a property to recover a debt owned by the owner of the property. The notice is mailed to parties affected by the sale of a property, advertised in local publication and recorded in public records. Among other information, it provides the date, time and location of the sale.
Lis Pendens: (LP,LIS)A publicly recorded notice of a pending lawsuit against a property owner that may affect the ownership of a property.
Release of Lis Pendens: (RL) Release of the above.
REO/Tenancy by Entireties: (TE) This is the end of the process. Real Estate Owned by the lender, this status indicates the property is now owned by the lender, bank or investor as a result of a foreclosure.
Beneficiary: Second party to a Trust Deed, the maker of the loan secured by the property and documented with a Trust Deed.
Deficiency Judgment: A judgment given when the security pledged for a loan does not satisfy the debt upon its default.
Deed in Lieu of Foreclosure: A deed to real property accepted by a lender from a defaulting borrower to avoid the necessarily of foreclosure proceedings by the lender.
Forbearance: Where lenders will let borrowers cease payments due to a job loss or emergency and make up past payments at the end of the loan. Others will allow graduated payments, drop the interest rate, and change the loan to an adjustable rate, from mortgage insurance payments.
Right of Redemption: The period after the foreclosure during which the homeowner can redeem the property.
Short Sale: A term used to describe a real property sale where the total sales proceeds are less than the total balance due against the property, including the costs of sales.
Trust Deed: A contract by which property is made security for the payment of debt or obligation without a secure performance of an obligation.
Trustee Deed: Document conveying ownership of property to highest bidder at a Trustee Sale.
Trustee Sale: The file number for the property in default.
Trustor: One of three parties to a Trust Deed; the borrower or maker of a promissory note.
