NOTICE OF DEFAULT - WHAT DOES IT MEAN

Notice of Default - How Does This Affect You When Your Bank Sends You This?
By [http://ezinearticles.com/?expert=Pete_D._Mitchell]Pete D. Mitchell

A Notice of Default (NOD) is a legal, publicly available document giving notice that a homeowner has not made their mortgage payments and is in default on their home loan. It is filed with the homeowner's county recorder's office.

In California and many other states a NOD filing starts the clock ticking to an actual forced sale of the home by the note holder (bank, private party, etc.). In most states there is a minimum of a 3 month period of time (90 days) where the homeowner can bring the loan current, and before the bank can legally take the next step towards the forced sale of the home. However, because the bank will at that point, only take a payment for the full amount of all past due monies, which the homeowner can not usually afford to do, the clock often continues ticking down to the forced sale of the home.

This is a very stressful time for homeowners as the amount that is owed and past due on the loan continues to build up, and the homeowner is receiving more and more (threatening) calls from the bank's collection agents.

This leads to homeowners finding themselves in a desperate position and being willing to grasp at straws, willing to believe anybody who says they can help them keep their home. It is at this point where they are most susceptible to the sales pitch from the "loan modification" companies. These companies who target homeowners in this situation, then swoop in to pluck money from the pockets of these homeowners, who are easy prey to their sweet sounding words.

When a homeowner is late on their payment by a single month, they are in default. That is what will start the bank calling. The official rel=nofollow [http://www.youtube.com/watch?v=ppeXYMzVy2A]Notice of Default is different from just a generic letter that says you're in default. Technically you are in default when you don't make a payment in that first month. Because it varies by situation and by bank, it's hard to say exactly when the bank will file an actual Notice of Default, but it's most often after 3 or 4 monthly payments have not been made.

Oftentimes the homeowner will get a letter either from the bank or the servicing company which is a copy of the letter advising of a formal Notice of Default, which has been filed with the county recorder's office. Many times people don't understand the significance of this letter or its full meaning.

In many situations banks don't actually send out this letter even though they say they do. Many homeowners and the public in general, often think banks are regulated and therefore always follow all the rules. Nothing could be further from the truth. The clerks handling these duties are low paid, minimally motivated people who often make mistakes and/or simply elect to do the least amount of work possible, because that's just the type of person they are. Because of this, paperwork is often lost, misfiled, misdirected or simply ignored. Many families truly don't know if an actual legal Notice of Default has been filed with their county or not, because they've never received any such paperwork.

Many families also see a lot of letters and documents come into their home, and they may not fully understand them. I've also talked with homeowners who literally don't even open mail from their bank or a government agency, because they just know it is bad news of one sort or another.

It is important to remember that whether the homeowner has actually received notice of the NOD or not, once the NOD is filed with the county, the bank is one big step closer to taking the home away from the family.

For more information and a Free DVD on foreclosure stopping techniques, visit [http://secretstostopyourforeclosure.com/]http://www.SecretsToStopYourForeclosure.com. Pete Mitchell is a financial planner with over 12 years in the business. He is the author of a best selling mortgage and investment book and as a foreclosure survivor he runs the Secrets To Stop Your Foreclosure.com Website.

Article Source: [http://EzineArticles.com/?Notice-of-Default---How-Does-This-Affect-You-When-Your-Bank-Sends-You-This?&id=2886329] Notice of Default - How Does This Affect You When Your Bank Sends You This?