How many people really know what a Notice of Default (NOD) is? You probably know that if you receive one of these, you're having trouble paying your mortgage or property taxes. For the sake of making this simpler, let's make the rest of this article about mortgage defaults only. Now, what do you do with this mortgage NOD? According to the California Foreclosure, LLC, A Notice of Default is the first step in foreclosure proceedings. The document is then recorded in the county in which the property is located at the request of the lender by a trustee. This recording gives constructive notice to the public that your mortgage is in default.
In the state of California, after recording of the NOD the borrower and junior lien holders (which are the second or third loans on the property) are given proper notification of the default, which gives the borrower 90 days to bring their account current. The period is referred to as the Reinstatement Period. This time period may very in other states.
What I'm finding in southern California is that people don't understand that they have only 90 days to take action on this default or it will go to a trustee sale. This is one big reason why many homes are going into foreclosure. So what kind of action can be taken? Well, here are a few suggestions as to what could be done if you receive a mortgage Notice of Default (NOD).
If you receive a Notice of Default, the most important thing is don't go into denial. Your denial may be the fear of what lies ahead, the feeling of embarrassment (what if someone you know finds out), or thinking that you'll get that big break next month and all the back payments will be paid off. These are all signs of DENIAL, DENIAL, DENIAL. STOP the Denial and TAKE ACTION NOW!!! If you tackle this issue head on, the outcome will work in your favor.
•1. Take a look at why you are having difficulty making your mortgage commitments? Did you lose your job; do you have other payments like a car payment and credit card debit that are dragging you down; is it hard for you to stick to a budget; or did your mortgage payment just adjust to a higher payment? After you have analyzed where the problem is stemming from, you can take action on that one specific thing.
•2. Next you need to find a way to stop the bleeding so you can repair the damage and get your mortgage payments current. If you have too much debit, can it be consolidated at a lower interest rate and payment? If you lost your job, will your lender give you a reprieve from payments for a couple of months if you pay off some of the outstanding balance? If you can't stick to a budget and are continually short of cash every month, should you think about getting out of this debt to a much simpler lifestyle?
These steps aren't any big secret but they do require one very important thing. That thing is ACTION. And with denial, there isn't any ACTION. Having been in the mortgage and real estate business for many years a lot of people come to me for advice on what to do when they get a Note of Default or a Notice of Trustee Sale. Many of them are waiting to long to seek help. The sooner you take control and tackle this fearful situation head on, the more control you'll have with the outcome. If you are reading this and you've received a NOD , please TAKE ACTION NOW. Pick up the phone and call someone in your area that can help. I'd be happy to help you find a consultant in your area if you need it. Just make the call.
Mary Morris, Consultant
Pacific Sands M & R