What is a Notice of Default?
February 1, 2007
The media has been headlining foreclosure data. "Foreclosures are up 50%!" Is this Chicken Little announcing that the sky is falling? As economists, real estate agents and perhaps potential buyers and sellers try to understand what is happening in the real estate market place, foreclosure data becomes of interest. Just a clarification as to what is contained in the foreclosure data being cited.
In California, most loans are "Deeds of Trust". In a Deed of Trust, there are 3 parties involved: the borrower (Trustor), The lender (Beneficiary), and the Trustee. When the borrower fails to make payments on the loan, the lender notifies the Trustee who then records a Notice of Default. The borrower then has 90 days to bring the payments up to date. Should the 90 days pass and no payments from the borrower have been received by the lender, the lender then has the Trustee record a Notice of Sale. The borrower then must bring all the payments current and/or pay off the entire amount of the loan plus accrued interest and penalties. The Notice of Sale must be published in a local newspaper 3 times in 21 days. If no payments have been made, on the date specified on the Notice of Sale, the property will be auctioned on the court house steps or at such public venue as is specified in the publication.
If the media are picking up the number of Notices of Default that have been recorded, this number is usually higher than the number of actual foreclosures. The process, as outlined above, actually gives the borrower slightly over 4 months to cure the default and stop the foreclosure.
If you receive a Notice of Default from your lender, contact us at Century 21 Lois Lauer Realty and we will go over the process and suggest possible solutions for you.
The media has been headlining foreclosure data. "Foreclosures are up 50%!" Is this Chicken Little announcing that the sky is falling? As economists, real estate agents and perhaps potential buyers and sellers try to understand what is happening in the real estate market place, foreclosure data becomes of interest. Just a clarification as to what is contained in the foreclosure data being cited.
In California, most loans are "Deeds of Trust". In a Deed of Trust, there are 3 parties involved: the borrower (Trustor), The lender (Beneficiary), and the Trustee. When the borrower fails to make payments on the loan, the lender notifies the Trustee who then records a Notice of Default. The borrower then has 90 days to bring the payments up to date. Should the 90 days pass and no payments from the borrower have been received by the lender, the lender then has the Trustee record a Notice of Sale. The borrower then must bring all the payments current and/or pay off the entire amount of the loan plus accrued interest and penalties. The Notice of Sale must be published in a local newspaper 3 times in 21 days. If no payments have been made, on the date specified on the Notice of Sale, the property will be auctioned on the court house steps or at such public venue as is specified in the publication.
If the media are picking up the number of Notices of Default that have been recorded, this number is usually higher than the number of actual foreclosures. The process, as outlined above, actually gives the borrower slightly over 4 months to cure the default and stop the foreclosure.
If you receive a Notice of Default from your lender, contact us at Century 21 Lois Lauer Realty and we will go over the process and suggest possible solutions for you.
posted by shirley harry at 9:31 AM
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