Once Notice of Default Is Filed

After a Notice of Default is recorded, the foreclosure process continues unless the homeowner resolves the delinquency or reaches an agreement with the lender.

During this period, homeowners may still have opportunities to:

  • Bring the loan current
  • Apply for a loan modification
  • Negotiate repayment options
  • Sell the property before foreclosure
  • Protect any available home equity

What Happens  Next?

  • It becomes a public record: Anyone can look up the property title and see that an NOD has been filed. Foreclosure rescue companies, investors, and the public routinely monitor these county entries. 
  • The property title is clouded: Because the default is recorded against the property's history, it impacts your ability to sell or refinance without satisfying the lender's debt through escrow. 
  • The legal clock starts ticking: Recording the document sets off specific statutory timelines. For example, in California, recording the NOD establishes a mandatory 90-day reinstatement period during which the borrower has the right to pay the arrears and stop the foreclosure. 

The Sequence of Events

  • The 120-Day Rule: Under federal Consumer Financial Protection Bureau (CFPB) regulations, a servicer generally cannot file or record an NOD until you are more than 120 days delinquent on your payments. 
  • The Recording: The trustee submits the document containing the borrower's info, property description, and default amount to the county clerk. The county applies an official recording stamp and document number. 
  • The Mailing: Once recorded, the lender is legally required by state statutes to mail a copy of the recorded NOD to the borrower via certified or registered mail—usually within 10 business days.

If the default is not resolved, the lender may eventually record a Notice of Trustee Sale, which schedules the property for a foreclosure auction.

Many homeowners mistakenly believe they have no options once a Notice of Default is filed.  In reality, this stage often provides an important window of time to evaluate solutions and take action before the foreclosure process reaches the auction stage.

The sooner a homeowner acts, the more options are typically available.