What Is a Notice of Default? What Homeowners Should Do Next

A Notice of Default (NOD) says a borrower has not met the terms of a loan. For a homeowner, this often means missed mortgage payments. In some states, a formal NOD is also a required step in foreclosure.

An NOD does not mean your home has been sold or a sale date has been set. But foreclosure may have started. The next steps depend on the notice you received and your state's laws.

What should you do when you get a Notice of Default?

Read every page. Find the title, dates, property address, and any deadline to act.
Check what kind of notice it is. Look for a county recording number, court case number, or trustee's name. A warning letter may not be a legal foreclosure notice.
Call your mortgage servicer. Use the number on your loan statement or the servicer's official website. Ask if foreclosure has started, how much you must pay to catch up, and what help is offered.
Talk with a HUD-approved housing counselor. Call 800-569-4287 or find a HUD-approved housing counselor. A counselor can help you plan your next steps. ^[1]
Act on legal deadlines. If you have court papers or a sale date, seek help from a lawyer or legal aid office right away. A call to your servicer does not replace a court response.

Does a Notice of Default mean foreclosure has started?

Sometimes. Your mortgage company may send a letter that says your loan is in default. That can happen before the legal foreclosure process begins. In some states, a recorded NOD is part of that process.

What you received	What it may mean	What to check
Default warning letter	Your lender says the loan terms have not been met	Amount owed and date to reply
Recorded Notice of Default	A formal foreclosure step in some states	Recording date and who to contact
Summons and complaint	A foreclosure lawsuit has been filed	Case number and court deadline
Notice of Sale	A sale has been announced	Sale date and where to seek legal help

There are two main types of foreclosure. In judicial foreclosure, the lender files a court case. In nonjudicial foreclosure, the process often starts with legal notices instead of a lawsuit. Some states permit both. Your state alone may not tell you which process applies to your loan. ^[2]

What should you look for on the notice?

Notice forms differ by state. Start with the details that help you identify the document and ask the right questions.

The Los Angeles County Department of Consumer and Business Affairs publishes an annotated California Notice of Default example. It can help you recognize common fields, but forms and requirements vary by state. ^[3]

Title. Does it say Notice of Default, Notice of Sale, or something else?
Recording details. If it was recorded, find the county stamp, record number, and date.
Name and property. Check the name, property details, and loan listed.
Past-due amount. Note the amount and the date used to work it out. Ask for the amount owed today.
Contact details. Find the trustee or sender. Check the contact details from a trusted source before you share records or pay anyone.

Read the rest of the notice too. It may explain your rights and steps you need to take. The date you got it in the mail may differ from the date it was recorded.

California example: Why the recording date matters

In California's nonjudicial process, recording a Notice of Default marks the start of the formal public foreclosure process. A later Notice of Sale is a separate notice that announces the auction. ^[3]^[4]

This California example is not a timeline for other states or legal advice about your notice. For advice about your notice, ask a qualified attorney in your state.

How much time do you have after an NOD?

There is no single U.S. deadline from an NOD to a foreclosure sale. The time depends on your state's law, the notice, and your loan.

For many home loans covered by federal servicing rules, the servicer generally cannot make the first legal notice or filing to start foreclosure until the loan is more than 120 days past due. Exceptions apply. This does not give you 120 more days after an NOD. It also does not mean a sale will happen on day 121. ^[5]

If you see a court deadline or sale date, get help checking it. Do not rely on a general timeline.

Can you still keep your home?

You may have options. Ask your servicer what it would take to bring your loan current. You can also ask about a repayment plan, forbearance, or a loan change called a modification. What is offered depends on your loan and finances. ^[6]

Can you afford the monthly payment now?

There are two different problems: paying what you missed and being able to pay each month from now on.

Our mortgage affordability calculator can help you organize income, housing costs, and other monthly expenses. It does not recommend a mortgage option or predict what your servicer will approve.

You can also use our Mortgage Servicer Call and Follow-Up Log to prepare for the call. Ask if you can apply for mortgage help and what records are needed. Federal rules may provide procedural protections for some complete loss-mitigation applications, but asking for help does not, by itself, stop foreclosure. ^[5]

What if you cannot keep the home?

If you can no longer afford the mortgage, you may need to look at ways to leave the home before a foreclosure sale.

Traditional sale: Selling may pay off the loan if the proceeds cover the debt and selling costs.
Short sale: If the sale will not cover the debt, approval from the mortgage holder and other lienholders may be needed.
Deed-in-lieu of foreclosure: With the lender's approval, you may be able to give the home to the lender instead of going through a foreclosure sale. Ask if any debt left over will be forgiven, and get the terms in writing. ^[7]

A deed-in-lieu is not a sale. It is not offered to everyone. A HUD-approved counselor can help you compare these paths. You may also need legal or tax advice.

Putting your home up for sale or asking about these options does not, by itself, stop a planned foreclosure. ^[5]^[6]

What if the notice is wrong?

Keep your loan statements, payment records, notices, and envelopes. If the balance looks wrong, ask your servicer how to send a written notice of error or request for information. The CFPB explains how this works. ^[8]

If court papers or a sale date are involved, get legal help while you check the error. Do not assume the dispute puts the case on hold.

Why are companies offering to buy your home?

A recorded notice may be public. Investors and other companies may find it and contact you.

Watch out for anyone who promises to stop foreclosure, asks for upfront fees for mortgage relief, or tells you to stop paying your servicer. You can get help from a HUD-approved housing counselor without paying a foreclosure rescue company. ^[9]

Where can you get help?

To review your options with a HUD-approved housing counselor, call 800-569-4287 or use our counselor finder:

Find a HUD-approved housing counselor near you

If you have court papers or a sale date, seek qualified legal help right away.

Want help organizing the dates, questions, and details on your notice?

Still have questions about missed payments or foreclosure?

Ask about this page or what may happen next. You will continue in Help — this is general information, not legal or counseling advice.

Sources

HUD, Housing Counseling.
CFPB, How Does Foreclosure Work?.
Los Angeles County Department of Consumer and Business Affairs, Understanding Real Estate Documents: Notice of Default.
California Courts, Your Rights in a Nonjudicial Foreclosure.
CFPB, Regulation X, 12 CFR §1024.41.
CFPB, If I Can't Pay My Mortgage Loan, What Are My Options?.
CFPB, What Is a Deed-in-Lieu of Foreclosure?.
CFPB, How Do I Dispute an Error or Request Information About My Mortgage?.
CFPB, Help for Homeowners: Avoid Foreclosure.

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