Notice of Default

You have heard about NOD, Read about it, do you know how close you are to it?

Ok so you’ve missed a few mortgage payments or you’re about to. When will the notice of default (NOD) arrive, what is coming next? We help people in these situations every day. Read below and feel free to contact us if you need some advice or help.

First let’s take a few steps back, identify the problem and see if we can avoid the dreaded NOD. Like any problem solving issue you should identify the source and correct the problem from there if possible.

Take Action:

1.    First off let’s start with the obvious. If your hardship is income related, have you explored all your avenues to generate additional income or business. Are you able to change jobs or get a pay rise. How about a second job. Can you cut back on expenses?.

2.    You may have been expecting your mortgage interest rate to adjust out of your budget for some time or it already has. Talk to a lender, can you refinance at a lower fixed rate?

3.    If the above has failed, notify your lender right away. Ask them if they have a solution for your situation.  Listen to what they say or recommend but do your homework before taking the bait. Don’t take their word for it without doing some research because they have been known to lead consumers down the path of to no return. Remember the banks have two basic rolls Lending money and Debit collecting. If you don’t understand what they have to offer ask a Realtor or your attorney.

4.    If your lenders offer is not making sense, talk to a reputable licensed full time Realtor. Realtors are in the trenches with these situations every day. First ask the Realtor a few questions to get a feel for their confidence level in working with situation like yours. If you feel comfortable with this Realtor make an appointment and bring all your financial documentation with you. Your Realtor should be patient with you, listen to your needs and then spell out all your options.

OK by now you should have a pretty good idea if you can avoid the notice of default. If you have exhausted all the above and still no dice it’s time to get serious and roll your sleeves up. Your Realtor if a good one should have given you all your options and some great advice. Some advice he/she may have given you as first options before recommending Short sale is the following:

Forbearance:

Forbearance is an agreement your lender may offer you to help get you back on your feet. This type of agreement is only temporary. Don’t be fooled by your lender that this is a permanent solution. This may work for you if you expect to increase your income before the term of the Forbearance expires. If you need a permanent lower payment this is not in your best interest even though your lender writes it in a way to confuse you.

Loan Modification:

Loan Modification is an option that may or may not work for you. The success is slim but with a little guidance on how to correctly file a request, there may be a small chance. Don’t rely on your lender. Most lenders simply don’t put the effort into helping you as it is complicated and time consuming. I highly recommend reading this post about Loan Modification and taking advantage of the Loan mod Kit. The kit has full instructions and pre-printed forms to help you file for the best possible professional results.

Foreclosure:

Foreclosure should only be a last resort. A foreclosure can ruin your credit and put the brakes on your life for the next ten years. If you have played your card right you can avoid foreclosure altogether by selling your home as a short sale.

Short Sale:

Short sale is the best way out at this point. By selling your home short of what is owed and having the lender forgive the debit, you can save your credit from further damage and recover much sooner.

Now you know where you stand:

OK It has been a disappointing route, all the above has failed, you have missed some payments and the lenders collection department has started sending threatening letters, including some titled “notice of default”. If you are only one or two months late don’t be alarmed. The official notice of default (NOD) can only be issued after the third month of delinquency. It is important to understand what a NOD looks like when it arrives. This is a real Notice of Default Sample The name and file numbers have been blacked out to protect our clients identity. A Notice of Default is a public recorded instrument.

Notice Of Default:

The Notice of Default arrived now what? By now if you have decided to do a short sale, you should have been in touch with a Realtor that specializes in Short sales. The experienced Short sale Realtor should have gathered all your required documentation (The Short Sale Package) and listed your home for sale. Time is of the essence at this point. In order to stop foreclosure you need an offer to submit along with a complete correctly file short sale package.

Short Sale Transaction:

Your Realtor may or may not have a short sale coordinator but in my opinion it is necessary as short sale transactions need special attention. From here on out your Realtor should keep on top of the sale and make sure the lenders don’t drop the ball. If all goes well the bank will accept the offer and close the deal. Be patient, Short sales can be a long painful process. We have had Short sale approvals in as little as two weeks and as long as 9 months. It all really depends on your lenders loss mitigation department and the Realtor processing your sale.

What to expect after NOD:

Once the lender files a notice of default, it is common to have your mail box jam packed with junk mail from companies offing you all kinds of services. Be careful, These companies sit watching the NOD’s filed each day and target the distressed home owners. But you are lucky, you have already done your homework and looked at your options. There are many people taking advantage of distressed homeowners making false claims that they can save your home. Many of these companies are just after that upfront fee then they will kick you to the curb out of pocket. Don’t go there you will regret it.

For more information or free advice feel free to call our toll free number 888-399-4844