A notice of default (Commonly referred to as a N.O.D.) 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 (plus an additional legal fee) is not paid in a given time, the lender may choose to foreclose the borrower's property. Any other people whom may be affected by the foreclosure may also receive a copy of the notification.
Typically a Notice of Default is issued to the homeowner by the lender when the homeowner falls 90+ days behind on their mortgage, although this varies from lender to lender and may also be dictated by local or state laws. A Notice of Default may also be published as "constructive notice" in the local newspaper classified ads. From there the homeowner has 90 days to pay the loan's arrearages (back payments). This is known as the "Reinstatement Period."
If after 90 days from the Notice of Default filing the homeowner has not paid the loan's back payments, the lender will authorize a Notice of Trustee Sale, and 21 days after the official Notice of Trustee Sale, the lender can sell the home at auction. The Notice of Trustee's Sale is recorded at the County Recorder's office in the County where the property is located. It contains the date, time and place where the auction will take place.
