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| What you can do when you receive a Notice of Default? |
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Question: What is a Notice of Default?
Answer: A Notice of Default (NOD) is a letter addressed to the borrower informing him or her that the loan is in arrears for about four or more months and the lender is initiating a foreclosure process. The borrower has to make the account current within 90 days or the property will be sold at public auction. The NOD is usually sent by certified mail.
Question: What can a borrower do when he or she received a NOD?
Answer: During the 90 day period given by the lender in the NOD the borrower can apply for loan modification, or have the property sold under short sale or pay the full amount of arrears to avoid foreclosure.
Question: When is the last time you can modify your loan?
Answer: Generally, you can apply for loan modification up to the end of the 90th day given under the Notice of Default (NOD). This is called the period of redemption. The 90 day period is given under the foreclosure law for the borrower to make his account up to date or current. The lender will also offer some suggestions such as forbearance of payment, short sale or loan modification during this period.
Question: What happen if after the 90th day the borrower did not apply for loan modification?
Answer: If after the 90th day and the borrower did not apply for loan modification, the Trustee (lender) will publish a Notice of Trustee Sale for 20 days. After the 20 days publication period, the property will be sold at public auction. Generally, the lender will be the purchaser of the property.
Question: What can the borrower do during the 20 day Notice of Trustee Sale?
Answer: Generally the lender may allow the borrower to pay the total missed payments plus cost up to 5 days before the sale date in the Notice of Trustee Sale. Failure on the part of the borrower to act in a timely manner will result in foreclosure sale.
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