Your Options After a Notice of Default

Foreclosure Has Started, But It Is Not Over

A Notice of Default begins the formal nonjudicial foreclosure process, but California law still gives you a statutory cure period and powerful protections. A complete loss mitigation application can stop dual tracking under the Homeowner Bill of Rights. You still have time, but you must use it deliberately.

Do not ignore the Notice of Default. The next notice is the Notice of Trustee's Sale, and after that, the auction itself.

Know When the Notice of Sale Will Be Recorded, and Use AB 2424 to Buy More Time

After a Notice of Default, the next milestone is the Notice of Trustee's Sale. Understanding exactly when that notice can be recorded is critical, because it controls how much runway you have left. If you want to buy yourself more time to work out a better result than a foreclosure, talk to an attorney broker early enough to time the notice to the trustee under AB 2424.

When leveraged properly, AB 2424 can give you 45 to 90 more days in the property. If you have waited this long, you need to be able to work something out, and those extra days can be the difference between a negotiated exit and a foreclosure. We can help you time the notice so you get that additional window to reach a better outcome.

The earlier you bring in an attorney broker, the more effectively we can sequence the notice and the loss mitigation timeline to maximize your time and your leverage.

Your Protections After a Notice of Default

• ●HBOR dual tracking ban: The servicer cannot move forward with a trustee sale while a complete loss mitigation application is under review.
• ●Single point of contact: You can demand a designated contact with access to the team evaluating your file.
• ●Reinstatement period: You have a statutory cure period to reinstate the loan by paying the arrears.

Warning: People Will Try to Buy Your Property, Especially Alt Finance "Bros" and disciples.

Once a Notice of Default is recorded, you will be contacted by investors and people trying to buy your property. Many of them are alternative finance pros who paid for a course and believe the best result, for you and for them, is for them to take over your mortgage. In general, this is a horrendous result.

These deals frequently fail. The property may no longer be in your name, but you can still get hit with credit problems and foreclosure notices when the new buyer stops paying. Worse, these schemes often hide the sale of the beneficial interest in the property to get around the due on sale clause. If you have done that, a lender might argue you no longer deserve your anti deficiency protections, which can result in you owing the bank money and suffering serious credit damage.

They will tell you that within a year or two they will get you off the mortgage. That is close to impossible unless they pay the loan off in full. In a down market, the strategy that was already tenuous in an up market will not work for almost any of them. What they typically do is walk away from your property and leave you hanging.

Do not let someone trick the bank into thinking the loan was paid off. Do not give up your anti deficiency protections for a scheme that is likely to fail. Talk to an attorney before you sign anything that transfers an interest in your property.