In California, if we had to approach the court every time default occurs, nobody would be closing any sales these days. Assuming all loan documents were properly prepared, executed, acknowledged and recorded, Notice of default simply needs to be delivered and recorded on title to the property. Three months after, if the default hasn't been cured, the trustee sale / foreclosure sale / auction of the property can be scheduled as soon as 3 weeks after proper service, recording and publication of notice of trustee sale (NOS). Thus, by the book, you have about 4 months from the date of the notice of default to the actual public sale of the property.
When you get your loan from a bank or other institutional lender, you'll have to sign along with other documents two most important papers: Promissory Note that is an actual promise and commitment to repay the debt that would also specify the terms of such loan including interest rate, how interest is calculated [believe it or not our public is very uneducated and really thinks it's a simple interest computation :) ], number of payments, any penalties for early repayment or late payments, etc.; and Deed of Trust that ties that Promissory Note to the land or real property (with its detailed legal description) making it a collateral and giving authority to the trustee of that Deed to sell the property in the event of default. The Promissory Note specifies exactly what constitutes the default and how it can be cured.
Although I personally was able to postpone such sale date on numerous occasions for my sellers when it came to negotiating a settlement with lenders through short sale, it is a very weak position to be in and, of course, the outcome is never guaranteed. Obviously, the stronger the offer the better your chances.
Generally speaking, a non-judicial Foreclosure process formally begins when the trustee records a Notice of Default (NOD) at the county recorder's office. To learn more about the difference between judicial and non-judicial foreclosure, and the procedures for each - http://foreclosureprocess.net/foreclosures
Sara Mehrpouyan CDPE
Specializing in Short Sale & Foreclosure
Dre License #01712757
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A notice of default is a notification given to a borrower stating that he or she has not made their payments by the predetermined deadline. It dictates that if the money owed ( and sometimes an additional legal fee) is not paid in a given time, the lender may choose to foreclose the borrower's property. Any other people who may be affected by the foreclosure may also receive a copy of the notification.
Depending on your state regulations, a notice is often required to be sent to the property address as well as any primary residence (if it is an investment home) known for the borrower.
The notice is filed with the local court in which the property resides and becomes public knowledge.
Once a Notice of Default is received, again depending on the state, you still have time to re-claim the home by making a payment in full for the mortgage amount. You can also try to contact your mortgage company/note holder and see if there are any other options to re-instate the loan to active status.
If you have more questions regarding a situation you may be in, you should contact a local real estate attorney to answer your questions.
For more information about buying a property that has been served a notice of default, you can check out my response to a question from a few days ago:
You can see my response in the middle...
In California, lenders typically do not file a Notice of Default until the borrower is at least 90 days behind in making payments. When a borrower has missed 2 payments and is 60 days behind, at that point many banks send out a 30-day notice of intent, which they are required by law to do before filing a Notice of Default.
Lenders must then wait 90 days. During that 90-day period, the borrower has the right to make up the back payments and reinstate the loan. After 90 days, the lender is required to publish a notice in the newspaper for 20 days and then may sell the property to the highest acceptable bidder on the courthouse steps. If no acceptable bid is received, the trustee then conveys the property to the lender.