This article is written by Peters and Associates.
Question: Yesterday, I came home from work, and some papers were attached to my door with blue tape. They read, “Notice of Default and Intent to Foreclose,” and stated that I had 30 days to opt into mediation or I’d lose my home. What is a Notice of Default? Do I still have options to avoid foreclosure?
Answer: A “Notice of Default and Intent to Foreclose,” or NOD, is a legal document that officially begins the foreclosure process.
In addition to the papers that were taped to your door, you probably received several separate copies of the same notice via regular and certified mail. These notices may have come in the days leading up to or in the days immediately following the notice taped to your door.
Unfortunately, you are now in active foreclosure and are at imminent risk of losing your home to a foreclosure sale. Although hardly a welcoming sight to a homeowner, with the NOD comes an option that you did not have previously, namely the Foreclosure Mediation Program, or FMP. As before the NOD, you still can try to save your home with a loan modification or bankruptcy, but now you have the added option of sitting down with your lender and/or your lender’s attorney, face to face, to discuss home-retention options.
Watch for these papers
1. The bank must send you a letter via first-class mail outlining the lender’s intent to accelerate the loan and/or foreclose. You will receive this letter no sooner than 30 days after your first defaulted payment.
2. The bank must file a Notice of Default and Election to Sell no less than another 30 days after sending the initial letter. Information about electing into Nevada’s foreclosure mediation process must be included in this notice.
3. The Notice of Default will be taped to the door and numerous copies of the same notice will arrive in the mail.
4. The homeowner has 30 days to decide whether to elect to begin the foreclosure mediation process.
5. If you elect to begin the mediation process the process will follow rules outlined by the state.
6. If you decide not to elect (and come to no other alternate remedy), a Certificate of Foreclosure Mediation will be issued and a Notice of Trustee Sale may be filed.
7. A Notice of Trustee Sale may be recorded again within a few days of the Certificate of Foreclosure Mediation issue. Just like the Notice of Default, the Notice of Trustee Sale will be taped to the door, and the homeowner should receive numerous copies in the mail. The sale is now a reality with a definite date and time.
8. An auction may occur no less than 21 days after the Notice of Trustee Sale is recorded. However, if the auction does not occur within 90 days of the notice, the entire process may be rescinded to start over.
What homeowners need to know
Actively pursuing a foreclosure alternative causes “tolling” to go into effect. Tolling means the timelines outlined by the law do not advance until the action causing the tolling is resolved.
When homeowners receive a Notice of Default, they have 30 days to respond. Assuming they can provide proof they are actively working on a resolution — i.e., they have sent in a “workout” packet and the bank has verified receipt — those 30 days are paused while the option is pursued. Essentially, the clock stops.
This also means that if a homeowner is actively pursuing a solution to their initial default payment, prior to the bank issuing a Notice of Default, the bank may not be able to issue an NOD until that pursuit comes to a resolution. Because of this, it’s important that homeowners are proactive about defaulted payments and don’t avoid or ignore any notice they receive. Every step taken to remedy the defaulted payments needs to be properly documented, and all records must be retained to prove the actions taken by the homeowner.
Ideally, all homeowners should take action before receiving a Notice of Default. If you are issued a Notice of Default, elect to begin the foreclosure mediation process and/or call an attorney as soon as possible to discuss your options.
Please note: The information in this column is intended for general purposes only and is not to be considered legal or professional advice of any kind. You should seek advice that is specific to your problem before taking or refraining from any action and should not rely on the information in this column.