Notice of Default: What It Means and What to Do

If you receive a Notice of Default, taking action quickly can help prevent foreclosure.  Here are some possible steps:

• Reinstate the Loan – Pay the past-due balance, including fees, to bring the loan current.
• Negotiate a Loan Modification – Work with the lender to adjust loan terms, such as extending the repayment period or lowering interest rates.
• Apply for Forbearance – If facing temporary financial hardship, request a pause or reduction in payments.
• Sell the Property – If keeping the home is not feasible, selling before foreclosure may help avoid credit damage.
• Explore a Short Sale – If the home is worth less than the loan balance, the lender may agree to accept less than what is owed.
• Consider Deed in Lieu of Foreclosure – Some lenders allow borrowers to voluntarily transfer ownership of the home to avoid foreclosure proceedings.

If you’re in this situation, it’s essential to communicate with your lender as soon as possible.  Seeking legal or financial guidance can also help you make the best decision for your circumstances.

A Notice of Default is serious, but it doesn’t have to mean the end of homeownership.  By understanding your rights and options, you can take proactive steps to resolve the issue and move forward.