Received a foreclosure notice of default and you’re not sure what it is, keep reading.
A notice of default is one of the first steps a bank takes towards the foreclousure process. In some state the notice of deault is attached to the home. Usually the letter is placed on a window or door.
The foreclosure notice of default must be sent to anyone who has an interest in the property (any other loans, lenders, or even contractors who are owed money for work done to a property will get a copy).
Therefore, If there is a lien on your property held by a contractor, 2nd mortgage lender or home owners association etc. they will be compensated first if or when the property is sold.
A notice of default is a serious action taken by the lender and it needs to be handle properly.
Some lenders may serve a notice of intention, which basically means a warning for the borrower that you are in breach of the contractual limitation set forth in your loan agreement.
The notice of intention isn’t all bad because this gives you time to negotiate with the lender. So, make use of the time to communicate with your lender to get your issue resolved.
Texas law requires the servicer to send the borrower a notice of default by certified mail. You are given at least 20 days to resolve the default before a notice of sale can be issued.
Not so long ago banks could default on your loan without any warning.
In fact, it’s happened even in the past few years – at least one bank has accidentally foreclosed on the wrong property and kicked people out of their house without due process or warning. It’s even happened around Richmond.
The notice of default is a very important step within the foreclosure process that gives people with an interest in the property to step forward and claim their rights – before it’s too late.
If you’ve received a notice of default, don’t wait. Time is definitely of the essence, and you should take action.
Here are a few key steps you should take:
1) Stay calm and don’t panic.
This may sound obvious, but it’s probably the most important. Anyone in foreclosure is dealing with a lot of stress beyond just the property. These situations don’t happen overnight, and they take a while to solve. You’ll get through it by practicing good coping techniques and taking good care of yourself and your family. Panic leads to bad decisions, so stay cool.
2) Educate yourself.
Learn everything you can about the foreclosure process in your state so that you know what’s happening and what’s coming up next. A great resource is HUD.GOV
3) Gather your resources.
There are also many non-profit and government resources available out there. You’ll want good legal and tax advice along the way. Definitely don’t try to do it all yourself. The foreclosure process is complicated with many nuances. Don’t attempt to tackle them on your own.
4) Learn your options.
We’re here to help you avoid foreclosure. We buy houses with cash. We can help you with short sales and even rent-back situations so you (potentially) may be able to keep living in your home. There are many more options than you are aware of.
5) Communicate.
The banks involved don’t want your property. They want money, and what you say matters a lot. You can slow down or stop the foreclosure process if you take the appropriate action. Stay connected with your lender and let them know the actions you are taking.
Conclusion
The notice of default is one of the first steps a banks takes towards the foreclosure process. Always keep in mind that the bank/lender doesn’t want your house, they want your or someone else’s money. If you find your self with a notice of default letter, stay calm, educate yourself, and know your options.
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