Notice of Default in California: What It Means & What to Do

If you've received a Notice of Default on your California property, you're probably feeling scared and overwhelmed. That's completely normal. But here's what you need to know: receiving a NOD does not mean you will lose your home. In fact, over 70% of California foreclosure filings are resolved before auction.

This guide explains exactly what a Notice of Default means, your rights under California law, and step-by-step actions you should take immediately.

What is a Notice of Default?

A Notice of Default (NOD) is a formal document filed by your lender (or their trustee) with the county recorder's office. It marks the official beginning of the foreclosure process in California.

Key Facts About the Notice of Default

• When it's filed: Typically after 3-4 missed mortgage payments (90-120 days delinquent)
• Legal requirement: Must be recorded at least 90 days before a Notice of Sale can be filed
• Public record: The NOD is filed with your county recorder and becomes public information
• Delivery: Must be mailed to you within 10 business days of recording
• Your cure period: You have 90 days to cure the default by paying all amounts owed

What Information is in a Notice of Default?

A California NOD must include:

• Property address and legal description
• Name of the trustee conducting the foreclosure
• Statement that a breach of the loan has occurred
• Nature of the default (usually non-payment)
• Election by the lender to sell the property
• Date the NOD was recorded

California Notice of Default Timeline

Understanding where you are in the process helps you know how much time you have:

Your Rights After Receiving a Notice of Default

California law provides significant protections for homeowners facing foreclosure. Know your rights:

California Homeowner Bill of Rights Protections

• No Dual Tracking: If you submit a complete loan modification application, the lender cannot continue foreclosure until they make a decision and you've had time to appeal
• Single Point of Contact: You're entitled to one person or team who handles your case throughout the process
• Written Decisions: Lender must provide written explanation if they deny your loan modification
• Appeal Rights: You can appeal a denied first lien loan modification

Your Right to Cure

During the 90-day period after NOD recording, you have the absolute right to cure (reinstate) your loan by paying:

• All past-due mortgage payments
• Late fees and penalties
• Attorney fees and trustee costs
• Property inspection fees
• Any other amounts required by your loan documents

Your Right to Reinstate (Even After 90 Days)

Even after the 90-day cure period ends and a Notice of Sale is recorded, you maintain the right to reinstate your loan until 5 business days before the scheduled foreclosure sale.

What to Do Immediately After Receiving a Notice of Default

Your Options After Notice of Default

Option 1: Reinstatement (Cure the Default)

Best for: Those who can access a lump sum to pay all past-due amounts

Pay everything you owe within 90 days (or up to 5 days before sale) to stop foreclosure immediately. Request a "reinstatement quote" from your servicer to know the exact amount.

Option 2: Loan Modification

Best for: Those who want to keep their home but need lower payments

Apply to permanently change your loan terms. Under California's no dual tracking rule, submitting a complete application pauses the foreclosure process.

Option 3: Forbearance Agreement

Best for: Those experiencing temporary hardship (job loss, medical issue)

Temporarily reduce or suspend payments while you recover financially. You'll need a plan to catch up on missed amounts later.

Option 4: Sell Your Home

Best for: Those with equity who want to avoid foreclosure on their credit

If your home is worth more than you owe, selling allows you to pay off the mortgage, keep remaining equity, and avoid foreclosure damage to your credit.

Option 5: Short Sale

Best for: Those who owe more than the home is worth

Sell for less than owed with lender approval. Less credit damage than foreclosure and lender typically waives deficiency.

Option 6: Deed in Lieu

Best for: Those who want a clean exit and have no junior liens

Voluntarily transfer ownership to lender in exchange for release from the debt.

Option 7: Bankruptcy

Best for: Those with multiple debts who need immediate protection

Chapter 13 bankruptcy creates an automatic stay that stops foreclosure immediately. You'll have 3-5 years to catch up on missed payments.

Frequently Asked Questions About Notice of Default